The Impact of Regulation on International Investment in Finland
The Impact of Regulation on International Investment in Finland examines what drives FDI into Finland and which domestic regulatory aspects may discourage foreign investment. The report analyses trends in FDI flows towards Finland and other Nordic-Baltic countries and discusses the benefits of foreign investment for the Finnish economy. It provides a comparative overview of the regulatory frameworks in force in Finland and its Nordic-Baltic peers, outlining both economy-wide and sector-specific findings, and explores how changes in these regulatory frameworks are linked to changes in FDI inflows in the region. Foreign investors’ views on Finland’s business environment complement these findings. The report underlines potential areas for reform and suggests policy actions that could further improve Finland’s investment climate and contribute to attracting and retaining more FDI, while also strengthening its positive impact.
Executive summary
In 2019, Finland’s inward FDI stock was 31% of its GDP, lower than an average 49% in the Nordic-Baltic countries. Finland hosts the largest number of greenfield investment projects in the region, but the average value of such projects has been declining since 2016. The value of cross-border M&A deals has also decreased in recent years. COVID-19 brings additional challenges to Finland’s ability to reverse these trends.
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