Evaluation of the Influence of the Export in Agricultural Products on the Baltic States Economic Growth

Abstract

The benefits of agricultural exports’ impact to developing economies have been confirmed by most of researchers. When analyzing the Baltic States, attention should be paid firstly to the peculiarities of agriculture and to relatively low subsidies of the EU funds in comparison with the old EU countries. In addition, the support of agricultural sector creates a relatively unequal conditions of competition towards other economic activities. As a result, it is doubtful whether the export of agricultural products (which was extremely funded during the year of 2002-2013) contributes to the prosperity of Baltic states’ economies. In order to meet set goal - to research the links between the export in agricultural products and economic growth of the Baltic States – correlation and regression analysis was used, covering the year of 2000-2016. Empirical calculations have shown that the export of agricultural products (by separate sections) contributes very little to the GDP growth of the Baltic economies; however, it negatively affects labor market indicators (self-employment, employment in land sector, the level of labor market). The reasons lie in rising prices of agricultural products (assessing the price index change), price indices (export growth is linked to higher agricultural prices), technological breakthrough in agriculture, which reduced the need for human capital and greater export opportunities for large farms, while mainly small size farms dominate in the Baltic States.

Keywords

• Agricultural products
• export
• Baltic states
• economic growth