The McGill International Entrepreneurship series
Edited by Marian V. Jones and Pavlos Dimitratos
Chapter 12: The Role of Inward FDI in Internationalization of Six Affiliates in Estonia: A Network Perspective
12. The role of inward FDI in internationalization of six afﬁliates in Estonia: a network perspective Tiia Vissak INTRODUCTION In Estonia, export competitiveness is still at a low level. After the dissolution of the Soviet Union, many trading arrangements broke down and most ﬁrms were forced to ﬁnd new foreign buyers and suppliers. The size of the country, with a population of approximately 1.4 million, can mean that even very young companies have to internationalize quickly. This is not easy especially for smaller local enterprises due to a lack of resources, capabilities and contacts. Consequently, these ﬁrms often require external assistance to become internationally competitive. The aim of this chapter is to analyse the impact of foreign direct investment (FDI) inﬂows on the internationalization of six Estonian afﬁliates and to demonstrate the importance of networks in this process. First, an overview of ﬁve different research themes will be given. Based on the discussion, two propositions will be drawn and examined, using the data from six foreign afﬁliates in Estonia. The ﬁrms’ internationalization patterns and beneﬁts from obtaining access to their foreign parent companies’ networks will be demonstrated. Finally, further research directions will be recommended. There is still much to be learned from examining the network approach in the context of an entrepreneurial ﬁrm (Coviello and Munro, 1995). There is no common body of knowledge concerning the interaction between trade, FDI and international production networks (Ernst and Guerrieri, 1998). The internationalization models, the network perspective or...
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