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Abstract
This article examines the developments in trade and direct investments between two northern economies, Finland and Russia. On the basis of a review of annual reports of 10 major Finnish companies, belonging to the electronic, construction, foodstuff, and forest industries, this article argues that Finnish-Russian economic integration can be characterized as ‘asymmetric.’ On the one hand, Finnish construction firms and food producers have become vitally dependent on performance of their Russian subsidiaries. They also demonstrate geographical expansion of their operations within Russia. On the other hand, Finnish electronic and forestry firms have abstained from making major investment commitments in Russia. For them, Russia was important either as an export market or as a source of raw materials. This article also investigates internationalization patterns of Finnish companies in 2000–2010, and comes to the conclusion that for them Russia has been relatively less attractive in comparison to such countries as Estonia, Poland, Hungary, China, India, Mexico, and Brazil.
Acknowledgements
The authors gratefully acknowledge financial support from the Academy of Finland.
Notes
1. These are the companies where the share of Finnish investors is at least 10%. Unfortunately, the methodology for collecting these data changed in 2007, when the task of data collection was transferred from the Bank of Finland to Statistics Finland (Statistics Finland is National Statistical Service bureau, http://www.stat.fi/index_en.html). This means that the data for 1996–2006 are not fully compatible with the data for 2007–2009.
2. However, some foreign construction companies have failed to succeed in Russia. Thus, in 2007, the major Swedish construction company Skanska decided to leave this market. As one of the company's representatives explained: ‘it was impossible in the dynamic Russian market to exercise the same classic corporate procedures that Skanska successfully used in more stable and predictable markets’ (Dranitsyna Citation2007).
3. In the 2000s, both BBH and Synebrychoff were acquired by the Danish Carlsberg Group.
4. For example, import quotas for poultry were cut by 20% in 2009 (Atria Citation2011, p. 25).