This paper investigates the resources and capabilities that determine firm-level adjustments after a sudden unexpected closure of a major export market. We focus on the effects of the 2014 Russian embargo on Western food exporters using the example of Estonian firms. The paper applies a novel multimethod approach consisting of Study I quantifying the embargo effect on the exports of all embargoed firms, and Study II conducting a multiple case study into three dairy exporters highly affected by the embargo. Study I employs a difference-in-difference model with matched embargoed firms as treatment. Study II builds on extensive document analysis that serves as input for interviews with the CEOs of the sample dairy firms. We find that pre-shock productivity is on average a good predictor of post-shock firm resilience (Study I), however, we specify that the key firm-level resources and capabilities necessary for successful post-shock adjustments might not be reflected in the standard quantitative productivity level measures (Study II). We conclude that key firm-level resources and capabilities for embargo-resilience are the quality of exporting experience, competitive product-market matching, absorptive capacity, and managerial vision and empowerment.

This study investigates the main inward FDI factors, i.e., motivational factors and obstacles/inhibiting factors associated with the subsidiary's export performance in the host country, Estonia. The study is based on 89 in-depth interviews with the CEOs of subsidiaries of firms in Estonia, using a semi-structured questionnaire. The study concludes that 27 independent variables are important when studying the antecedent factors of the subsidiary's export performance. The study reveals five research streams from the literature review, namely inward FDI, outward FDI, motivational factors of FDI, obstacles/inhibiting factors of FDI, and the subsidiary's export performance. The most prominent research stream is the obstacles/inhibiting factors of FDI and both outward FDI and motivational factors of FDI are also important. Additionally, the study investigates 31 factors, of which 13 are found to be important factors based on SEM fit. In particular, six motivational factors and seven obstacles/inhibiting factors significantly influence the subsidiary's export performance.

Our analysis of matched employee-employer data from Estonian firms (years 2006-2013) shows that an increase in labor churning is related to a positive change in labor productivity during an economic crisis. During boom years, churning is related to a negative change in labor productivity. Only in services during the crisis did foreign firms have a stronger positive relationship between labor churning and labor productivity changes than domestic firms. However, our analysis at the individual level does not confirm that, during a crisis, foreign firms in services hire more employees with characteristics that have been found to be related to productivity increases.

The EU-South Korea free trade agreement (FTA) represents a case of comprehensive trade liberalization between two major economies with large automotive industries. This article examines and compares the total and automotive industry trade effects of the EU-South Korea FTA. The empirical gravity analysis shows asymmetric effects between the bilateral exports of EU and Korea. Trade-enhancing effects are found in both gross and value-added trade indicators of EU automotive exports, while no substantial effects are detected in Korean exports. The post-FTA trade dynamics suggest that the removal of industry-specific non-tariff barriers (NTBs) played an important role in facilitating EU automotive exports.

The barriers to higher education–industry cooperation (HIC) have been studied extensively. However, it is not yet clear which barriers affect which partner firms, which barriers may prevent cooperation altogether or which drivers help to overcome which specific barriers. To answer these questions, the authors conducted an original survey (a novel sample that included micro firms and small and medium-sized enterprises) and looked at HIC barriers in relation to firm characteristics and cooperation drivers. More than half of the survey sample had engaged in HIC. The results suggest that small export-oriented firms may not find suitable competences in higher education institutions and are therefore less likely to engage in HIC. Larger companies do engage in cooperation, but find strategic differences (goals, stances, time allocated) to be significant issues in cooperation. From the viewpoint of firms, possible solutions (drivers) include easy access to more information on HIC opportunities as well as support and training for student mobility.

This exploratory article aims to take first steps towards understanding whether a regional cultural background has, among other determinants, an influence on a person’s entrepreneurial behaviour, relying on the example of Germany. A multilevel approach is applied combining the Global Entrepreneurship Monitor individual-level data about entrepreneurship with up-to-date cultural dimensions indicators based on Hofstede’s original approach at the regional (NUTS 1) level. The results indicate that regional cultural context is an important determinant of entrepreneurial behaviour. At that, different cultural dimensions have different impacts, and the impact also differs across different stages of entrepreneurship. A lower level of uncertainty avoidance in a region could have a positive impact on early-stage entrepreneurship, whereas the established business ownership seems to be encouraged by a lower level of power distance.

The purpose of this paper is to clarify whether domestic or foreign firms gained more from labour churning while adjusting to the Great Recession in Estonia. During times of high unemployment, all firms can raise their requirements for new employees, but in times of crisis foreign firms may have more resources available for restructuring. We analysed matched employee-employer data from Estonian firms from 2006 to 2013, and show that an increase in labour churning is related to a positive change in labour productivity during economic crisis. During boom years churning is related to a negative change in labour productivity. In both cases a slightly upward convex pattern can be noticed. Only in services during the crisis did foreign firms have a stronger positive relationship between labour churning and labour productivity changes than domestic firms. However, our analysis at the individual level does not confirm that during a crisis foreign firms hire more employees with characteristics that have been found to be related to productivity increases. We also show empirically that hiring employees who relatively often change jobs is negatively related to changes in labour productivity. In light of the world-wide virus-related crisis of 2020, this paper proves that economic downturns can be a good opportunity to restructure the pool of employees.

In deep contrast with several CEE economies, Estonia as a part of the Soviet Union had no direct access to the world market up to the middle of the 1980s. The entire internationalization was conducted in the form of exports through centralized foreign trade agencies of the Soviet Union. Therefore Estonian firms had very little experience, even by indirect export – the first and most widespread method of foreign market entry. The situation changed radically after Estonia regained its independence in 1991. The reallocation of trade from the intra-Soviet Union trade towards neighboring Scandinavian countries and the EU in general was very rapid. The share of Russia and other CIS countries in Estonian export declined from 75 per cent in 1992 to 7 per cent in 2001. Even so, the internationalization of Estonian firms was accomplished in early 1990 primarily by using indirect and direct exports. Only since the mid-1990s did Estonian firms use outward FDI more widely as the market-entry method.

Purpose The purpose of this paper is to clarify whether the age-productivity curve is different for low-waged and high-waged employees. Design/methodology/approach Productivity growth is decomposed at the firm level into contributions by hired, separated and staying workers. Based on a matched employer-employee database of Estonian firms from 2006 to 2014 and considering the age as well as wages of employees, a panel data model with fixed effects is constructed to show the relative productivity of each cohort of employees. Findings High-waged employees appeared to be relatively more productive than low-waged employees and middle-aged were more productive than young or old employees. However, the productivity difference between young and old employees was not statistically significant. The age-productivity curve of high-waged employees appeared to be flatter than that of low-waged employees. Only in knowledge intensive services were the low-waged old employees statistically significantly less productive than high-waged old employees. In the manufacturing industry, the young were more productive than in services, in knowledge intensive services the old were less productive than in traditional services. Research limitations/implications - The productivity of employees is only analysed for cohorts of employees. Practical implications - Employers can be encouraged to hire older employees because old employees are shown to remain at least as productive as young employees. Originality/value The decomposition of labour productivity at the firm level is further developed, as the statistical difference between the productivity of different groups of employees is analysed.

Abstract This paper aims to find out the differences between Northern European and Northeast Asian consumers product packaging designs perception and choice (based on preference). Focusing on two important product packaging visual design elements – color and picture location – effect on attention, emotions and preference-based choice. Data were obtained in two different culture groups, via two different studies, with a methodological contribution by combining three different methods: eye tracking, facial expressions-based emotion measurement and conjoint analysis. Study 1 (n = 57) findings showed that some level of adaptation strategy is needed for the Northern European and Northeast Asian markets. Even if the differences did not reveal in customers’ explicit preferences (in study 2, n = 258), they can be revealed in implicit, subconscious processes (emotions, attention), which also indicates the need to use a multimethod approach to fully understand different processes of consumer behavior.

This article evaluates and compares the potential of different European Union regions to support university-industry cooperation as an important precondition for the implementation of the smart specialisation strategy. By using exploratory factor analysis, we found three independent dimensions describing the potential of regions to support university-industry cooperation. Research revealed a strong East-West divide between EU regions in all three dimensions. The findings indicate that many regions in Central Eastern European countries but also some regions in Southern Europe do not seem to have enough supportive strength to be able to benefit from the smart specialisation policy of EU. In order to benefit from the smart specialisation strategy, more attention should be given to the region-specific approach. In the universities from the lagging regions, knowledge translation capabilities must be developed. Core region universities need to be more motivated to cooperate with universities from the lagging regions. Regional level governance motivation and their capabilities toward the support of university and industry interactions should be developed and supported. The creation of linkages between core and weaker regions should be encouraged over the capacity building inside the weaker regions.

Collaboration between firms and universities, two main actors in the national system of innovation, brings the needs of the business world to the attention of the scientific community and allow scientific progress to be diffused more quickly in the real world. The aim of the paper is to compare the determinants of university-industry cooperation across countries and to identify differences between firms that cooperate with domestic and those that cooperate with foreign universities. We use data from 14 European countries taken from the 2008 community innovation survey. The degree of internationalisation is the main determinant of cooperation. Exporting or foreign-owned firms are more likely to cooperate with foreign universities. Differences in cooperation determinants also appear between the four country groupings that we extract by a cluster analysis on variables describing their institutional settings and national innovation systems. Notably different is the group of countries with a weak national innovation system.

This study aims to find out how academic workers’ characteristics are associated with their ownership in firms. It is based on quantitative data for the whole population of academic staff from Estonian public universities. Variables portraying age, academic field, professorship, number of publications and research grants are applied in analysing academic workers having ownership in firms. The results indicate that being a professor, having Science as the primary academic field, and a larger number of publications increase the likelihood of academic ownership while a larger number of grants decreases it. The age of academic worker is not a significant determinant of the likelihood of academic ownership.

This chapter explores the effect of the 2008_09 crisis on the region of North Estonia. The region was hit very hard owing to its high openness and dependence upon foreign trade. However, a swift and decisive national policy response helped foster very rapid recovery, with a radical reduction of public expenditures and accelerated utilisation of EU funds particularly important factors.

This paper aims to clarify how changes in the age and wage composition of the labour force are related to the productivity of firms over the business cycle. Based on a matched employer-employee database of Estonian firms from 2006–2014, we decompose changes in the labour force and distinguish between hired, separated and staying workers. Considering the age and wage of workers, we link changes in the labour force to changes in productivity. Using fixed effect panel data analysis we indicate that among high-waged employees middle-aged are the most productive, the productivity decreases with age but remains higher for old compared to young. the increase in labour productivity is supported by the decreasing share of employees with the lowest productivity. The share of high-income employees was reduced in the crisis and later mostly low-income employees were hired. In addition, structural changes have accelerated the process of ageing. There are, however, sector-specific differences because in knowledge intensive services, ageing is not as prevalent as in industry. We also show that labour productivity is higher in the youngest quartile than in the oldest quartile of enterprises in all four periods.

The EU-South Korea FTA, enforced in 2011, represents a significant case of a trade deal signed between two major developed economies that also belong among the largest car exporters in the world. This paper examines the effects of the EU-South Korea FTA on bilateral automotive industry trade, comparing them to the changes in total bilateral trade. The empirical analysis applies the gravity model framework with its contemporary methodological advancements and estimation techniques. The empirical results show that the trade-enhancing effects of the FTA in the auto trade are substantially higher than in total trade. Additionally, EU bilateral auto exports have increased more than South Korea’s exports. The dynamics of the post-FTA trade flows suggest that the removal of the automotive industry’s non-tariff barriers have played an important role in trade facilitation, especially for EU exports. The enforcement of the FTA has also been followed by notable changes in the structure of EU auto exports with the share of higher value final goods increasing and input goods decreasing.

This article documents a new dataset of cultural distance measures both at the country and regional levels in Europe. These measures were calculated using data from the European Value Survey and European Social Survey. The composite index of cultural distance and the distances according to separate dimensions both were calculated. The created matrices can be used by researchers when applying the concept of cultural distance, for instance in international business research, but it also helps to operationalise cultural distances at the regional level by multinational enterprises. Examples of comparisons of the distances between different European countries and regions enabled by the new dataset as well as a comparison to analogical measures based on Hofstede's original scores are given. (C) 2015 Elsevier B.V. All rights reserved.

This paper studies firm failure causes in the forest sector and is based on a thorough analysis of 50 bankruptcy cases from Estonia. The results indicate that in the forest sector in more than a half of the occasions firm failure was triggered by either only internal or external reasons. Namely, for 26 % of cases bankruptcy was caused by only internal reasons, for 30 % by only external reasons and for 44 % by both reasons. The most common causes noted in court judgments were concentration on only a few customers (resulting in cessation of cooperation or unpaid claims), unfavourable market developments (drop in demand or in product prices and increase in competition or in input factor prices), lengthy unprofitable activities, lack of working capital, too low share of equity or inability to find additional financial resources, and management errors.

The current article is focused on the role of financial assistance from the European Union in the budgets of the three Baltic countries. They all have seriously benefitted from the support of EU structural funds, which have reached close to five per cent of their GDP. Based on the case of higher education research funding, the article argues that the Baltic countries overlook the additionality principle of the European Union cohesion policy. Structural funds are replacing the Baltic countries’ own funding. During the current EU programming period between 2014 and 2020 the exit strategies should be prepared by the governments of Baltic countries in order to be able to finance research with significantly lower support from EU cohesion funds. The precondition is that instead of a short-run view, in the coalition treaties of the Baltic governments, a long-term strategy for how to move toward knowledge intensive economies is also needed. The first and most urgent need is to improve the quality of use of the EU support funds by all three countries in order to support longrun productivity growth and increase the competitiveness of the Baltic countries.

The current article is focused on the role of financial assistance from the European Union in the budgets of the three Baltic countries. They all have seriously benefitted from the support of EU structural funds, which have reached close to five per cent of their GDP. Based on the case of higher education research funding, the article argues that the Baltic countries overlook the additionality principle of the European Union cohesion policy. Structural funds are replacing the Baltic countries’ own funding. During the current EU programming period between 2014 and 2020 the exit strategies should be prepared by the governments of Baltic countries in order to be able to finance research with significantly lower support from EU cohesion funds. The precondition is that instead of a short-run view, in the coalition treaties of the Baltic governments, a long-term strategy for how to move toward knowledge intensive economies is also needed. The first and most urgent need is to improve the quality of use of the EU support funds by all three countries in order to support longrun productivity growth and increase the competitiveness of the Baltic countries.