Browsing by Author "Väisänen, Heta Tuulia"

Foreign direct investments have proven their significant role as part of welfare and economic growth of the countries. Recent years have shown alarming signs of weakening development of inward investment levels to Finland. Therefore it is claimed to be important to research different factors affecting the investment decisions in the context of Finland. The purpose of this study is to provide additional descriptive information by conducting a qualitative empirical research with interviews and desk study of secondary materials. This study examines the attractiveness of locational determinants in Finland for the inward-oriented Foreign Direct Investments (FDI). The study applies GEMS-model of geographical cluster formation, location decisions and sustainability by Kamath et al. (2012) in the research data in order to test whether 12 defined factors are supported in the Finnish context. Based on the model, the attractiveness of Finland for inward FDI is analyzed by reflecting theoretical data with insights gained from interviews and recent reports about FDI in Finland. The research method of the study is a qualitative case study conducted with content analysis and supported by a desk study of secondary sources. In empirical part in total 9 persons were interviewed representing enterprises, national and regional level investment promotion organizations. The interviews were conducted as semi-structured and open-ended theme interviews. The desk study data covered reports about FDI in Finland done by Finnish government, international consulting agencies and OECD. Results of this research indicated that all 12 factors of GEMS model where fully or partially supported as location determinants for inward FDI. Also some inter-connectedness between different factors was observed. The results of this research also contained some strengths and weaknesses of Finland attracting foreign direct investments. The clear strengths were innovativeness, skilled work force, business climate and emerging niche fields like biotechnology. Weaknesses were found to be market size, location and inefficiency; high taxation and prices; and lack of motivation to get more foreign investments. Threats were self-reinforcing negative spiral in the context of declining investment levels and the inability to keep up with the pace with peer countries in the competition on FDIs. Opportunities were special connections to Russia, Baltics and Asia; good results of international competitiveness surveys might be utilized in widening the awareness of Finland and its possibilities; creation of dynamic pioneering markets around Finnish R&D capabilities; and finally better utilization of potential outside Helsinki. The main conclusions of this study were that internationalization and competition in Finland should be reinforced; strategic prioritization and focus is needed in investment promotion actions; the motives behind investments should be understood; and attention should be given for regional differences and specialized smaller concentrations within Finland.