Growth drivers of Finnish-Estonian general cargo transports

Abstract

Nearly the entire European trade of Finland is being executed through short sea shipping connections to Estonia, Sweden and Germany. Earlier the most important connections were to Sweden and Germany, but during Estonia’s new independence era, volumes to this alternative direction have increased considerably, and are continuously growing (time alone is good proxy for growth). This cannot be said for transport flows to Sweden, and Germany also holds high uncertainty.

Based on the findings of this research, it is argued that Estonian connection growth was caused by different factors. One important factor was European Union membership in the year 2004. It should be emphasized that this was step-wise and was realized a decade ago. The main influence is that of the development of bulky trade. As measured in weight, both export and import of Finland with Estonia was found to be significant. However, in monetary terms only Finnish imports from Estonia was statistically significant. Finnish exports in turn to Estonia in value terms have contributed a negative effect (or even being insignificant). As the regression model was expanded, taking into account all three Baltic States and Poland, reliable additional findings couldn’t be drawn. Completed regression analysis shows that the explanation power of GDP based models became much lower after the years 2005‒2006.