Free Economic Zones’ Influence on Regional Development in Baltic States

Abstract

Purpose and Originality: The purpose of this research was to identify how Free Economic Zones (hereinafter – FEZs) influence regional development process and to give some evidences from Baltic States (Lithuania, Latvia and Estonia). The value of the research is achieved by revealing what kind of challenges FEZs are dealing with participating in the regional development. This research is presenting results of the original empirical research made in Baltic States.

Method: The purpose of the study was achieved by using approaches of Theory of Economic Development and System Theory to explain how Free Economic Zones are acting (in relations with other regional actors) to influence the regional economic development in Baltic States. The data was collected by applying the explanatory qualitative research. The main method was the semi-structural interviews with representatives of FEZs in Lithuania, Latvia and Estonia. The method of qualitative content analysis was used for the analysis of research data.

Results: Results of this research has shown that FEZs actively interact with regional actors of host region such as public administration bodies, NGOs, businesses, universities and EU Commission in certain regions. It was revealed that although at different level in each investigated region, FEZs in Baltic States make influence on the regional development, providing new economic activities, investments in infrastructure, attraction of advanced businesses as well as formation of new businesses creates an impact on the regional development.

Society: The research results give some ideas for regional actors (stakeholders of FEZs, public administration bodies) what are main challenges for FEZs and what is needed to be done to exploit their potential to gain more added value for regions.

Limitations / further research: As the empirical research was conducted in three FEZs, results can not be generalized for all FEZs in Baltic States. But in the future the sample could include all FEZs from Baltic States and more representatives of them. More over a comparative analysis of countries with similar economic and social development level is recommended.