The Impact of Regulation on International Investment in Finland

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 forei...

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Detalles Bibliográficos
Autor principal: Organisation for Economic Co-operation and Development (author)
Autor Corporativo: Organisation for Economic Co-operation and Development, author, issuing body (author)
Formato: Libro electrónico
Idioma:Inglés
Publicado: Paris, France : OECD Publishing [2021]
Edición:First edition
Materias:
International business enterprises > Law and legislation.
Investments, Foreign > Law and legislation.
Commercial treaties.
Ver en Biblioteca Universitat Ramon Llull:https://discovery.url.edu/permalink/34CSUC_URL/1im36ta/alma991009704575706719
Tabla de Contenidos:
  • Intro
  • Foreword
  • Acknowledgements
  • Abbreviations and acronyms
  • Executive summary
  • Key findings
  • Key policy conclusions
  • 1 Trends and benefits of foreign investment
  • 1.1. Introduction
  • 1.2. Recent FDI trends in Finland and in the Nordic-Baltic region
  • 1.2.1. Finnish inward FDI is not keeping pace with that of other Nordic-Baltic economies
  • 1.2.2. More and more FDI into Finland originates outside the EU
  • 1.2.3. Finnish services sectors attract most FDI
  • 1.3. Trends in cross-border Mergers &amp
  • Acquisitions and greenfield projects
  • 1.3.1. Cross-border M&amp
  • A deals in Finland favour the IT sector
  • 1.3.2. Finland attracts the largest number of greenfield projects
  • 1.4. The benefits of foreign investment in Finland
  • 1.4.1. FDI's social and economic contribution
  • Foreign affiliates play an important role in the domestic labour market and economic activity
  • Foreign-owned companies reward skills
  • Gender pay gaps remain regardless of who owns the firm
  • 1.4.2. Most FDI in Finland targets knowledge-based services activities
  • FDI benefits from Finnish technical expertise and leads to technology diffusion
  • 1.4.3. Foreign MNEs facilitate GVCs integration
  • FDI provides a platform to boost host country's export performance
  • Foreign MNEs exports indirectly sustain Finnish jobs
  • Services sectors are important channels for export success
  • 1.5. Conclusions
  • References
  • Annex 1.A. Data sources
  • OECD International Direct Investment Statistics database (BD4)
  • Eurostat FATS
  • TEC
  • TiVA
  • Refinitiv, M&amp
  • A database
  • Financial Times fDi Markets database
  • Notes
  • 2 Finland's domestic policy and regulatory setting
  • 2.1. Introduction
  • 2.2. The general regulatory environment
  • 2.2.1. Entering the Finnish market
  • Screening mechanisms apply to certain foreign corporate acquisitions.
  • Broad definitions and open timelines leave some uncertainty for investors
  • Screening mechanisms in other countries of the Nordic-Baltic region
  • New legislation introduced screening of real estate acquisitions
  • Foreign branches' permits represent an additional administrative step for non-EEA investors
  • Relatively long processing time to start a business in Finland, despite few administrative steps
  • Minimum capital requirement only for public limited liability companies
  • 2.2.2. Recruiting talent from outside the EEA is burdensome
  • Residency requirements for directors and the CEO
  • Tax incentive for foreign key employees
  • Limitations to the movement of foreign talent
  • Recruiting non-EEA workers is subject to skill shortage in the domestic labour market...
  • …and entrepreneurs and start-ups need proof of financial means for a residence permit
  • But there are some exceptions to labour market testing and signs of increased flexibility
  • Planned reforms seek to streamline entry processes
  • Other Nordics and Baltics regulate entry of foreign nationals in similar ways
  • 2.2.3. Most foreign providers enjoy the same procurement terms and conditions as domestic and EU tenderers
  • 2.2.4. Regulatory transparency and competition
  • Pro-competitive policies could improve product market regulation
  • Finland has public consultations for new legislation but no vacatio legis
  • Appeal and redress rights facilitate competition in Finland
  • 2.3. Sector-specific regulation
  • 2.3.1. Telecommunications
  • 2.3.2. Construction
  • 2.3.3. Professional services
  • Engineering &amp
  • architecture
  • Accounting &amp
  • auditing
  • Legal services
  • 2.3.4. Transport
  • Air transport
  • Maritime freight transport
  • Rail freight transport
  • Road freight transport
  • 2.3.5. Logistics
  • 2.3.6. Postal and courier services
  • 2.3.7. Distribution.
  • 2.4. Favourable regulatory environment for digital trade
  • 2.5. Regulatory heterogeneity and the Single Market
  • 2.5.1. There are similarities in regulation with other Nordic-Baltic countries
  • 2.5.2. There is still room to deepen the single market
  • 2.6. Conclusions
  • References
  • Annex 2.A. Finland screens certain foreign corporate acquisitions
  • Various sectors and activities may fall under the scope of screening
  • Different screening mechanisms and thresholds
  • Notes
  • 3 The impact of regulatory barriers on FDI into the Nordic-Baltic region
  • 3.1. Introduction
  • 3.2. Empirical approach
  • 3.3. Main findings
  • 3.3.1. Country-level determinants of investment flows
  • 3.3.2. FDI flows less freely to countries with more restrictive regulations
  • 3.3.3. Restrictions bite along different dimensions
  • At-the-border versus behind-the-border policies
  • Discriminatory versus non-discriminatory policies
  • Policies affecting movement of professionals, competition and regulatory transparency
  • 3.3.4. Regulatory heterogeneity is costly for foreign investors
  • 3.3.5. Restrictions to digital services are important for FDI across all sectors
  • 3.3.6. Country-level regulatory landscape affects FDI location choice
  • 3.4. Conclusions
  • References
  • Annex 3.A. Methodology
  • Econometric specification
  • Robustness analysis
  • Additional results
  • Annex 3.B. Definition of variables and estimation results
  • Notes
  • 4 Finland's business climate in the eyes of foreign investors
  • 4.1. Introduction
  • 4.2. Respondent's profile
  • 4.3. Drivers of FDI
  • 4.3.1. Technology, knowledge and skills are the main drivers of FDI into Finland
  • 4.3.2. Market access attracts many foreign investors
  • 4.3.3. Local partners, infrastructure and risk diversification drive some FDI into Finland
  • 4.4. Regulatory obstacles.
  • 4.4.1. Very few difficulties setting up a business
  • 4.4.2. Businesses call for a more predictable operating environment
  • 4.4.3. Difficulties attracting and bringing in talents from abroad
  • 4.4.4. Strict labour market regulation affects growth and internationalisation prospects
  • 4.4.5. Other regulatory aspects
  • 4.5. Funding opportunities and incentives
  • 4.6. Investment trends
  • 4.7. Impact of COVID-19
  • 4.8. Conclusions
  • References
  • Notes
  • 5 Policy conclusions
  • 5.1. Introduction
  • 5.2. General policy implications
  • 5.2.1. Foster Finland's technology excellence in the eyes of foreign businesses
  • 5.2.2. Address skill shortages by facilitating foreign talent mobility
  • Reduce processing times and extend the duration of residence permits
  • Simplify labour market tests
  • 5.2.3. Promote smooth arrival and integration of foreign talent
  • Ensure swift entry of foreign talent
  • Strengthen efforts to retain foreign students and researchers
  • Promote the integration of foreign professionals (and their families)
  • 5.2.4. Consider improving the flexibility of the Finnish labour market
  • 5.2.5. Streamline entry into the Finnish market
  • Increase predictability in FDI screening
  • Speed up company registration and operational permits
  • 5.2.6. Further increase regulatory transparency
  • Adopt further measures to strengthen regulatory impact assessment and monitor gold plating
  • Promote transparent and non-discriminatory public procurement
  • 5.3. Sector-specific policy considerations
  • 5.3.1. Investment in ICT could benefit from further pro-competitive measures and harmonisation
  • 5.3.2. Reforms in transport and logistics can facilitate market entry and enhance competition
  • 5.4. Towards a more attractive destination for FDI
  • 5.4.1. Reassess incentive offering
  • Promote greater transparency of funding decisions.
  • Better targeting the portfolio of available incentives
  • 5.4.2. Increase efforts to promote Finland as an attractive FDI destination
  • 5.4.3. Ensure that benefits of FDI are more inclusive and far-reaching
  • 5.4.4. COVID-19 and FDI: address challenges and explore opportunities
  • 5.4.5. Strengthen the dialogue between the government and the business community
  • References
  • Notes.

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