Handbook of Research on European Business and Entrepreneurship
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Handbook of Research on European Business and Entrepreneurship

Towards a Theory of Internationalization

Edited by Léo-Paul Dana, Isabell M. Welpe, Mary Han and Vanessa Ratten

This unique Handbook illustrates how entrepreneurs across Europe tackle internationalization. This timely and important book identifies patterns and builds a theory of international entrepreneurship in Europe.
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Chapter 12: Internationalization of Enterprises in Estonia

Tiit Elenurm


1 Tiit Elenurm Entrepreneurs in the Estonian economy have, for the last 15 years, been continuously exposed to international competition. After the collapse of the command economy and regaining independence in August 1991, Estonian governments have neither built customs barriers nor applied any differentiated support measures discriminating against foreign or domestic entrepreneurs. Architects of the economic transition policy in Estonia did not have good alternatives to the policy of open doors as a small population of 1.4 million was considered too limited a market to create a ‘greenhouse’ environment for protecting entrepreneurs in infant industries. Only in May 2004, when Estonia became a member of the European Union and joined the common tariff policy of the EU, did tariffs applied to imports outside the EU become an important factor influencing entrepreneurial choices in the field of internationalization. Already in 2001 the share of EU countries was 69.5 per cent in Estonian exports and 56.5 per cent in its imports (Statistical Office of Estonia, 2004). In 2004, the share of the enlarged EU-25 in Estonian exports was 80.0 per cent and in imports 77.7 per cent .The role of EU countries as export destinations has not been so high for Latvian (77 per cent) and especially Lithuanian (66.4 per cent) enterprises in 2004 (Statistical Office of Estonia, 2005). Estonian entrepreneurs in agricultural and food businesses had to compete with subsidized imports form the European Union already in the 1990s. At that time the Estonian economy started...

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