extending business activity at a host territory depends on other factors as well (such as international market trends, company’s performance, corporate strategy, etc), the role of experience accumulating process should not be underestimated. It is essential for development agencies to establish and maintain long-term contacts with a company. One of the ways to keep long-term relations with investors is establishing of ‘after-care team’, which collects feedback of companies about their investment experiences in order to increase their satisfaction. (Young 2005, 112; Morgan 1997, 499). Moreover, small projects should not be neglected for their size and limited impact on regional economy, because they might have a good potential of growth in future.
Both learning processes discussed above are based on companies’ own experiences. However, investors learn not only through own experience but also through cumulative experiences of other investing companies in particular host territory. This learning-by-others’experience can be labelled as experience spillover process. Experience spillover process is of a particular significance at initiation stage of investment projects, when a company is choosing possible host territory for the location of its new unit. In other words, experience spillover process is a key element of place marketing and, thus, of future development trajectories of a territory. Foreign companies already established within a host region can be used for promotion of a territory as a favourable environment for investment. Successfully working company is a best advertisement for a region.
Paragraphs above have discussed three different ways in which companies learn during investment process and what implications those learning types have for local or regional development offices. But learning is not one-way street and development agencies can learn a lot from their work on each investment project. MNEs are carriers of international standards in business management as well as mirror of latest changes in business environment. The establishing of a subsidiary by MNEs gives a chance for a host region to learn and update its development strategy to requirements of a contemporary international business. The investment experience can be valuable source of information for local development bodies and the efficiency of this information can be increased through conscious approaching of investment episode as a process of learning. The most important result of learning occurs in sphere of investment management. Working with MNEs, development agencies face challenge of meeting high standards of international business, direct experience, which is difficult to replace by information drawn from books. New knowledge received through implementation of investment project can be used for strengthening managing skills of staff in development agencies as well as improving regional investment and development strategy. This statement is supported by several empirical researches, such as Morgan’s (1997) study of Welsh industrial economy. According to Morgan the necessity to meet requirements of foreign direct investors made regional development agency to revise its traditional regional development policy and to bring it nearer to needs of contemporary business.
Renewed development strategy facilitates reinvestment and supports diversification of Welsh economy from domination of coal and steel industries into service and manufacturing based economy.
To conclude with, the ability of regional development agencies to learn and adapt flexibly to requirements of foreign investors is growing in importance all over the world. Globalisation demands MNEs to search for combination of low costs (labour costs and other) and high quality and efficiency of production (skilled labour, management, etc) (Fabry and Zeghni 2002). That has an important implication for territories competing for FDI. Strategies based on high quality of services provided for potential investors are more beneficial for regions than ‘race to the bottom’ strategy, which emphasises cheap labour, weak environmental or labour regulations, etc (Young 2005, 109). Thus, host territories’ investment strategies should be more focused on concrete needs of each investor, and aimed at developing long-term relations with companies to facilitate reinvestment into regional economy, as well as to guarantee spillover of positive references from existing investors to potential ones.
References 1. Bradshaw, Michael J. (2005) Foreign Direct Investment and Economic Transformation in Central and Eastern Europe. In Turnock, David (ed) Foreign Direct Investment and Regional Development in East Central Europe and the Former Soviet Union: A Collection of Essays in Memory of Professor Francis ‘Frank’ Carter. Ashgate, Aldershot, pp. 3-19.
2. Cook, Philip and Kevin Morgan (2000) The associational economy, Firms, regions and innovation. Oxford University Press, New York.
3. Dyker, David A. (1999) Foreign Direct Investment in Transition Countries:
A Global Perspective. In Dyker, David A. (ed) Foreign Direct Investment and Technology Transfer in the Former Soviet Union. Edward Elgar, Cheltenham, pp. 8-26.
4. Fabry, Nathalie and Sylvain Zeghni (2002) Foreign direct investment in Russia: how the investment climate matters. Communist and PostCommunist Studies, 35, pp.289-303.
5. Kuznetsov, Andrei (1994) Foreign Investment in Contemporary Russia: Managing Capital Entry. Houndmills, St.Martin’s Press.
6. Morgan, Kevin (1997) The learning Region: Institutions, Innovation and Regional Renewal. Regional Studies, 31.5, pp.491-503.
7. Very, Philippe and David M. Schweiger (2001) The Acquisition Process as a Learning Process: Evidence from a Study of Critical Problems and Solutions In Domestic an Cross-Border Deals. Journal of World Business, 36 (1), pp.11-31.
8. UNCTAD (2005) World Investment Report 2005: Transnational Corporations and Internationalisation of R&D.
9. Young, Craig (2005) Place Marketing for Foreign Direct Investment in Central and Eastern Europe. In Turnock, David (ed) Foreign Direct Investment and Regional Development in East Central Europe and the Former Soviet Union:
A Collection of Essays in Memory of Professor Francis ‘Frank’ Carter. Ashgate, Aldershot, pp. 103 - 121.
Juha Ruusuvuori University of Joensuu, Karelian Institute PERCEPTIONS OF CROSS-BORDER INTERACTION IN THE FINNISH-RUSSIAN BORDER REGIONS Introduction In the present-day integrating Europe, several political discourses emphasise international networks and cross-border contacts as tools in competing in the globalising world. International and cross-border contacts are seen necessary not only in national level, but in regional and local level development as well. While state borders loose their meaning as a separating factor, have border regions encountered a new situation by being enabled to direct cooperation across the borders. In the Finnish-Russian border this has meant above all opportunities to an increasing integration with the neighbouring side of the border, but also challenges of how to benefit from the partial opening of the border, which has the status of external border of the European union, as well.
This paper presents main findings of the interviews collected from 81 local cross-border cooperation (CBC) actors in North Karelia and South Karelia in Finland (altogether 39 respondents), and in the Republic of Karelia and Leningrad region in Russia (42 respondents). The interviews are based on the Finnish-Russian contribution to the European union funded EXLINEA research project (years 2003-2005), which has examined opportunities and constraints of cross-border cooperation at the EU’s external borders. Karelian Institute of the University of Joensuu has been responsible for executing the Finnish-Russian case study research.
Perceptions of cross-border interaction (CBI) Importance and on the other hand problematic of cross-border relations is as well pointed out by the interviewed Finnish and Russian CBC actors. Among the actors, cross-border interaction between Finland and Russia is seen to benefit both sides of the border. However, mutual interaction between the Finnish and Russian border regions is considered yet low and is expected to increase. Equal benefiting on both sides is regarded very important, because unbalanced benefits would cause a situation, which does not encourage to sustaining cooperation in a long-term.
Most significant barriers regarding the CBI are frequent changing of the rules in business, corruption, and security problems, to which all the Finnish respondents took a more serious view than their Russian counterparts. Further, bureaucracy at the border (including visas, tariffs, queuing, and bureaucratic procedures in exports and imports), different language, and in addition in the Finnish side prejudices (especially indifference) towards the other were emphasised in terms of barriers. Moreover, as regards the Russian side, the respondents pointed out insufficient assistance by national, regional and local level associations and agencies, while in the Finnish side they were not seen as barriers at all. In the Russian side, only local government and European organisation’s assistance for CBI were regarded as sufficient.
Interestingly, although the level of CBC is supported to be increased and the bureaucracy of the border crossing to be alleviated, the respondents were not enthusiastic about abolishing all the institutional barriers of the border. For instance visas and the present level of border control were generally accepted. This manifests on one hand, that the border still represent a meaning of (soft) security protection and a construct of national identity to the citizens and is important as such, but on the other hand, it expresses dependence of international scale politics, which in the Finland’s case mean commitment to the Schengen agreement, and waiting of European union’s outlook on visas towards Russia.
The Finnish and Russian respondents don’t actually identify themselves with the idea of a “cross-border” region, but they both consider it as a desirable aim. They recognise common cross-border interests and some small scale examples of cross-border regionalism and find acceptable influences resulting from a more intensive cross-border interaction, but regard the border yet as a separating factor, however.
Regarding identification of a cross-border regionalism, the respondents recognise some small scale regionalism efforts. For instance in Imatra, there has introduced an alleviated visa application procedure to young persons (comprehensive school pupils), by allowing the visa to all those who apply it, for free. This is wished to lower the threshold to cross the border and make acquaintance to the other side and with the people living there. The experiment is seen as important in bringing nearer the young citizens across the border, because some respondents in Imatra were especially concerned about young peoples indifference towards their Russian neighbours. Another and a different type example of small scale cross-border regionalism is given by a Finnish customs officer, who see the unified procedures on both side border checkpoints as an evidence of cross-border regionalism – although as a very specific branch example as it is.
Conclusions In this paper I have discussed shortly the findings picked from the interviews made to Finnish and Russian cross-border cooperation actors, by concentrating on the subjects of meanings of the border, and cross-border regionalism. The results show, that the Finnish-Russian border is seen as an opportunity, which has still institutional and mental obstacles to be overcome. Although the respondents represent experts who are specialised in cross-border cooperation and are working to promote it, nonetheless, they are not enthusiastic about abolishing all institutional barriers. This also contributes to the observed absence of the feeling of a common cross-border region. On both sides, however, cross-border regionalism is regarded as a desirable long-term aim. The above mentioned small scale cross-border regionalism practices operate in given policy frames and are not recognised by a larger publicity, but as a long-term goal, it can be assessed that through these new established practices there is a possibility to achieve a perceptual change also regarding the concepts of border and cross-border regionalism.
Rebecca T. Richards Professor, University of Montana and Fulbright Senior Scholar, University of Joensuu, Fall THE ROLE OF THE INTERNATIONAL NON-WOOD FOOD FOREST PRODUCT INDUSTRY IN LOCAL AND REGIONAL DEVELOPMENT In recent years, non-wood forest products (NWFPs) have received increasing attention as a means of alleviating rural poverty and promoting rural development while maintaining forest sustainability and biodiversity (see Angelsen and Wunder 2003; Neumann and Hirsh 2001). In general, NWFPs are conceptually defined by the United Nations Food and Agriculture Organization (FAO) as “goods of biological origin other than wood, derived from forests, and other wooded land and trees outside forests" (FAO Forestry 1999). In the boreal and cold temperate forests, the most commonly collected NWFPs are primarily wild berries, mushrooms, and medicinal plants (Lund, Parjari, and Korhonen 1998).
In the Russian Federation, the harvesting of NWFPs, especially wild berries and mushrooms, significantly contributes both to household dietary sustenance and nutrition as well as supplementary household income (Panteleeva 2004). Since the dissolution of the Soviet state in 1991 and the subsequent instability in the food product industry, potato and bread consumption in Russia has increased while dietary intake of foods rich in protein, minerals, and vitamins has declined (Panteleeva 2004). Hence, household consumption of wild berries and mushrooms remains critical for health and well-being. In addition, the sale of wild berries and mushrooms provides significant supplemental household income for many Russian rural households. For some, wild berry sales alone can comprise two-thirds of the family’s annual income (Paneteelva 2004), and wild berries provide significant extra cash income for poor rural people (Sossinksy 2002).
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