The foreign trade and foreign direct investments (FDI) as factors of international competitiveness of small and big countries in their period of transformation: case of Poland and Baltic States (Estonia, Lithuania, Latvia).



The inflow of FDI and liberalization of foreign trade in particularly with the UE have become integral components and accelerators of development processes in Poland and Baltic States. The scope of the impact however differs in each country, which could be explained also by the size of the country, measured by its territory, number of population, GDP per capita as well as their internal and external policies. The inflows of FDI and development of the foreign trade are particularly important for such small countries like Baltic States, for which they are the main sources of the GDP.

In the context of the theory of international competitive advantages (Porter, Ozawa, Vernon, Balassa) FDI and foreign trade determine the growth of competitive advantages. The latter is observed in the quantitative changes in international turnovers, in terms of trade, in the revealed comparative advantages (RCA) indexes, in the employment in high and medium-high industries, in intra-industry trade indexes and current accounts. As key quality changes considered to be technological changes in the production processes as well as in the R&D sector. The indicators above also depend on the other factors than FDI or trade. One of the important factors in building the competitive and innovative advantages is the appropriate policies on national and the EU levels, supporting the higher quality of goods and services, ecological standards, etc. and developing their institutions necessary to improve to build competitive capacities.