, Volume 37, Issue 1, pp 15-29

The pattern, pull, and potential of Baltic Sea trade

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This paper describes the current conditions of trade in the Baltic Sea region and considers the strength of trade affinities between countries and country groups within that region. The evidence supports a strong affinity between Estonia, Latvia, and Lithuania to the Baltic Nordic countries. The paper also considers how sensitive Swedish exports are to per capita GDP of importing countries and how that varies across industries. Some of the evidence supports a positive relation between product differentiation and the per-capita GDP sensitivity. Among this evidence is the finding that for Swedish exports, distance sensitivity and per-capita GDP sensitivity are negatively related.

Received: January 2001/Accepted: April 2002
The authors are thankful for funding from the EU's INTERREG IIC Programme through SEBTrans. They also appreciate the helpful comments provided by Börje Johansson.¶An earlier draft of this paper was presented at the Udevalla, Sweden Conference 2000 entitled “Entrepreneurship, Firm Growth and Regional Development in the New Economic Geography”.