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Estonian and Latvian business environment survey
Estonian-Latvian cross-border small and medium enterprise cooperation for expansion to neighboring markets
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Study objective and methodology
Ordered by the Estonian Business Chamber in Latvia and Valga Town Government in the framework of the DELBI project.
Objective: To map the need for support network and partnerhip search, interest in cross border cooperation and hindering factors.
Target group: companies with 1-99 employees, 6 regions in South Estonia and 11 regions in North Latvia.
Sample: 150 Estonian and 154 Latvian companies. Random sampling, distribution of the sample the same as in the study universe (according to sector, region, number of employees).
Data collection: Computer Assisted Telephone Interviewing, in August 2012. Majority of the respondents were managers of the company.
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ESTONIA: Pärnu-, Tartu-, Põlva-, Valga-, Viljandi- and Võrumaa.
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LATVIA: Alūksnes, Cēsu, Gulbenes, Limbažu, Madonas, Ogres, Saulkrastu, Siguldas, Valkas, Jūrmala, Valmiera.
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Profile of the companies (1)
73%
15%
6%6%
ESTONIA, number of employees
1-4 5-9
10-19 20-99
45%
24%
16%
15%
LATVIA, number of employees
1-4 5-9
10-19 20-99
37%
28%
15%
20%
ESTONIA, year of foundation
During last 5 years (2007-2011)
6-10 years ago (2002-2006)
11-15 years ago (1997-2001)
More than 15 years ago
16%
19%
23%
42%
LATVIA, year of foundation
During last 5 years (2007-2011)
6-10 years ago (2002-2006)
11-15 years ago (1997-2001)
More than 15 years ago
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Profile of the companies (2)
15%
7%
4%
74%
ESTONIA, having a development plan
For the next 1-3 years
For the next 4-5 years
For more than 5 years
NO
38%
6%4%
52%
LATVIA, having a development plan
For the next 1-3 years
For the next 4-5 years
For more than 5 years
NO
26% of Estonian and 48% of Latvian companies have a development plan.
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Level of cooperation
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Countries where products/services are marketed
ESTONIA
Estonia
Latvia
Lithuania
Other European states
Russia
other
97%
11%
5%
23%
2%
1%
LATVIA
Latvia
Estonia
Lithuania
Other European states
Russia
other
98%
19%
15%
16%
9%
3%
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Cooperation with companies in the neighbouring country
20%
6%
74%
ESTONIA
Currently co-operating
Have coop-erated
Have not co-operated
22%
11%
67%
LATVIA
Currently co-operating
Have coop-erated
Have not co-operated
Main areas of cooperation: Estonia: import of goods from Latvia, export of goods to Latvia. Latvia: import of goods from Estonia, export of goods to Estonia, exchange of
information and knowhow.
Main reason for stopping the cooperation: was not profitable.
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Reaons for not operating in the market of the neighbouring country
ESTONIA LATVIA
Not enough initiative
The market is not attractive enough
Our goods/services are not suitable
Not enough information
Latvian or Estonian regulations are hindering
Language barriers
Not enough resources or work force
Enough work in the home country/ no need
Have not thought about this possibility
other
5%
11%
17%
1%
5%
19%
41%
13%
13%
6%
28%
27%
4%
23%
1%
8%
19%
9%
From those who have never cooperated.
„Other“: distance, we work for a bigger company, locals provide enough service themselves.
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Interest in doing business on the neighbouring market
9%
10%
77%
4% Within the next 1-2 years
Within the next 3-5 years
NO
Don't know
22%
17%
54%
7% Within the next 1-2 years
Within the next 3-5 years
NO
Don't know
19% of Estonian and 39% of Latvian companies would be interested.
ESTONIA LATVIA
From those who have never cooperated or do not do it anymore.
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Need for information
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The level of knowledge on marketing oportunities in the neighbouring country
3%
20%
24%
53%
ESTONIA
Very good
Rather good
Rather bad
Very bad
8%
27%
41%
24%
LATVIA
Very good
Rather good
Rather bad
Very bad
23% of Estonian and 35% of Latvian companies consider their current knowledge to be good.
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Looking for or obtaining information on the marketing opportunities in the neighbouring country
ESTONIA LATVIA
Through business partners or acquaintances
On the Internet
By visiting companies in the neighbouring country
At a seminar or conference
Media
other
Have not obtained any information
15%
14%
7%
2%
1%
2%
77%
34%
23%
9%
4%
5%
2%
49%
Obtaining information during last 12 months.
„Other“: communication with consumers, professional association.
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Need for information on the economy and market of the neighbouring country
ESTONIA LATVIA
Economy in general
Legislation and tax system in general
Establishing a branch-office
Establishing a company
Market situation of a spesific field
Different marketing oportunities
Cooperation possibilities with companies
Thematic seminars/trade fares/events
other
Do not need any information
10%
12%
6%
3%
24%
19%
27%
12%
3%
59%
26%
42%
39%
27%
49%
33%
49%
42%
3%
21%
„Other“: price level in the market, economic situation of the companies.
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Suitable information channels for finding partners for cross-border cooperation
ESTONIA LATVIA
Internet based database for looking for partners
Information point with face to face service
Information hotline
Trainings or seminars
other
Do not need information for finding cooperation partners
86%
26%
19%
18%
7%
5%
84%
27%
35%
28%
10%
4%
From those who cooperate in the neighbouring country or have the interest to begin.
„Other“: trade fairs, internet, through partners, personal consultations.
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Conclusions
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Cooperates or has cooperated in the neighbouring country
Has the interest to begin cooperation
Has good knowledge
Has obtained information during last year
Needs information
Has a strategic plan
Has 5 or more employees
Was founded more than 10 years ago
26%
19%
23%
23%
41%
26%
27%
35%
33%
39%
35%
51%
79%
48%
55%
65%
LATVIA
ESTONIA
The interest and the level of activeness of the Latvian companies is higher. They also plan their activities more – companies with strategic plans cooperate more.
The more passive state of Estonian companies is also related to their smaller size – companies with 1-4 employees are less informed and do less strategic planning.
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