The investment development path and small developed economies : the case of Finland

Abstract

This study examines the development of foreign direct investment in Finland in relation to the Investment Development Path model and other small developed economies. The study attempts to understand the involvement of foreign direct investment and government involvement in the transformation of Finland’s natural assets to created assets and understand the affects of foreign direct investment on Finland’s development as an economy. It is concluded that the transformation into a knowledge economy and development of created assets in Finland has been due to a complex combination of foreign direct investment activity and government involvement. It is also concluded that there have been positive affects from inward foreign direct investment to the Finnish economy, but that future research should be conducted in order to be able to make suggestions for future policy.