Abstract. Although small and medium enterprises (SMEs) are the backbone of national economies, they face many barriers and constraints towards innovations, particularly eco-innovations. In the European Union (EU) eco-innovations had been recognized as an important contributor for sustainable and green growth. The aim of the study is two-fold: 1) to determine the main barriers of eco-innovations' development in Latvia; 2) to compare the state of the main identified barriers among the EU countries. The main barriers of eco-innovations are identified via statistical analysis of SMEs managers' attitudes, using the Eurobarometer survey questionnaire. Performing the statistical analysis two factors are extracted, which account 81.7 % of the common variance, and are indicated as the main barriers for eco-innovation. These factors are financial resources (72.3 % of total variance) and human resources (9.4 % of total variance). Latvia and Lithuania score similarly both factors, but Estonia rates the environment as the most important, leaving human resources on the second position. Using the factors as dimensions all EU countries show differences in the rates between the four clusters.Keywords: eco-innovations, factor analysis, barriers, SMEs, survey. IntroductionThe European Union (EU) strategy and policy, which is supported by legislation package, strongly turns the economic development towards sustainability. Sustainable growth is one of the priorities of the EU strategy; and is based on three pillars: economic, environmental and social. It contains initiatives supporting the green growth (e.g., circular economy), resource efficiency, zero waste programs, including the support of eco-innovations [1][2][3][4]. The resource-efficiency is a key strategy of eco-efficiency and considerably the main target of eco-innovations [5][6].At the same time, the measures related to the "green" development of small and medium size enterprises (SMEs), for instance "Green Action Plan for SMEs", are also created [4]. Furthermore, it is confirmed worldwide that SMEs are the economic backbone, as well as of the EU [7][8]. SMEs represent over 90 % of all EU businesses and account for two out of three jobs; and in 2014 accounted for 67 % of total employment and 58 % of total value added in the EU average (EU-28) non-financial business, but in Latvia -79 % of total employment and 69 % of total value added [9].Although, the common concept and definition of eco-innovation being still in the developing stage [10], the shortest and the latest version has been given by the Eco-Innovation Observatory as -"…any innovation that reduces the use of natural resources and decreases the release of harmful substances across the whole life-cycle" [6]. The Eco-innovation index, which represents ecoinnovation performance across the EU Member States, shows that the level of eco-innovation capacity of Latvian enterprises among the EU-28 is rather low, because Latvia is on the 20th position with the eco-innovation index 75 (EU average -100) [11].Despite eco-inno...

The share of simultaneous exports and imports of the same types of products by a country or intra-industry trade has gown continuously over the last century. At the same time, share of inter-industry trade when countries specialize in production and trade occurs only between industries has declined. Trade in differentiated products of the same sector and the same stage of processing is referred to as a horizontal intraindustry trade. Such products are close substitutes for each other in terms of factor inputs and consumption. Trade in products of the same sector at different stages of processing is referred to as a vertical intra-industry trade. According to economic theory, a rise in the share of intra-industry trade is occurring within the trade growth in general due to an economic development and broader integration. Since early nineties, Latvia has remained a net importer of agri-food products. At the same time, both exports and imports of agricultural commodities and processed food products has consistently grown, with total trade turnover increasing. The objective of the study is to determine the share of the intra-industry trade and structural changes in the sectors of Latvian agricultural production and food processing over the last decade. To reach the research objectives, Grubel-Lloyd intraindustry trade indexes, Brülhart marginal intra industry trade indexes and Thom-McDowell indexes of total marginal intraindustry trade were compiled for Latvian agri-food trade data over ten years period from 2002 to 2011. The research results show consistently high share of intra-industry trade in total Latvian trade in agricultural commodities and food products over the whole period. A shift from predominantly vertical marginal intra-industry trade towards horizontal marginal intraindustry trade is observed.

Periodic evaluation of EU Member States Rural Development Programme (RDP) specific policy interventions is considered crucial in policy development. The main reasons for the evaluation of specific policy interventions are the assessment of a programme’s impact, the improvement of programme management and administration, identification of necessary improvements in the delivery of interventions and meeting the accountability. The core question to be answered in programme evaluation is whether the stated objectives are accomplished by particular intervention (support or „treatment” provided to programme participants). The main problem in the process of evaluation is the assessment of the counterfactual outcome by modelling the situation where treatment is absent. The counterfactual outcome has to be estimated by statistical methods as it is usually not observed. General equilibrium effects occur when a programme affects units other than its participants. The most important possible impacts are the substitution effect and the displacement effect. Displacement effects are unplanned and indirect. They usually play a more important role in the evaluation at the programme level than in the evaluation of RDP individual measures. Displacement effect is the programme effect that occurs in a programme area at expense of another area. It takes place if farms located in one geographical area, which is not a subject to RD support, becomes adversely affected by a support provided to farms located in another geographically area. The existing study provides an assessment of the displacement effects on the employment in unsupported units at the programme level after the net effects on the employment calculated at the measure level are aggregated over the entire programme.

This paper analyzes the direct impact of the EU funding on the spatial distribution of Foreign Direct Investment (FDI) inflows in Latvian rural districts. While the determinants of inflows of FDI are often analysed at the regional and national level, the impact of the EU funding on the spatial distribution of FDI between the administrative entities within a single country is not extensively studied. The research objective is to assess the possible net impact of the EU funding on FDI inflows in Latvian rural districts, thus enabling the more targeted policy decisions with respect to the structure in future EU funding. To evaluate this impact, Instrumental Variables method is applied using the panel data on Latvian rural districts. The research results confirm that positive direct impact of the EU funding on the FDI inflows in Latvian rural districts exists, and it is substantial and statistically significant. At the same time, confounded ‘third factors’ might exist with negative impact on FDI inflows. While the spatial distribution of the FDI inflows in several regional aspects is rather uneven, the respective differences in the EU funding are less pronounced confirming the existence of negative ‘third factors’. Hence, the structure of the support by EU funds has to be revised to improve the local potential determinants of the FDI inflows with emphasis on infrastructure and human capital.