External Influences for Balance of Trade in Small and Open Economies
External Influences for Balance of Trade in Small and Open Economies

Summary/Abstract: This paper aims to analyze peculiarities of balancing the trade in small and open economies and to identify main external and internal influences that shape the structure and volumes of international trade. The case of the three Baltic States was selected. Overall, 62 economic indicators that reflect the situations inside countries, also situation in main trading partners’ countries were involved in the research. Multidimensional data analysis methods were applied to get most information from the data. This research supports the idea that external factors tend to influence the intensity of international trade rather than higher surplus or lower deficit of international trade in small and open economies, as they affect both imports and exports in highly common way. Internal factors and foreign direct investments seem to be those that notably drive structural changes for balancing the international trade. From economic policy perspective it is a discussion where to put more emphasis – on expanding linkages with foreign countries or on investing in innovative activities and quality of resources for stronger trading positions in global markets.

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