Academic journal article Journal of Economic and Social Development

What Should Estonia Do in Order to Increase the Value of Its Exports of Goods to Slovakia and Slovenia?

Academic journal article Journal of Economic and Social Development

What Should Estonia Do in Order to Increase the Value of Its Exports of Goods to Slovakia and Slovenia?

Article excerpt

1. INTRODUCTION

In recent years, entrepreneurship has become increasingly important (see Hisrich, 2010; Hisrich, Peters and Shepherd, 2010; and Schaper et al., 2013). This is particularly true for international entrepreneurship (see Zucchella and Scabini, 2007; Oviatt, Maksimov and McDougall, 2011; Fernhaber and Prashantham, 2015; and Rialp, Rialp and Knight, 2015). This is an important factor in international trade in goods and services. Therefore, in order to increase the value of international trade in goods and services, which, in recent years, has been affected by the financial, economic and social crisis (see Acharyya and Kar, 2014; Temouri and Jones, 2014), mainly in Europe (including Estonia and some other countries in Central and Eastern Europe (CEE), for example, Latvia, Lithuania and Slovenia, and in North America), its main stakeholders should promote international entrepreneurship. Additionally, they should promote cooperation between entrepreneurs/enterprises in areas such as science and technology including those that relate to information and communication. The main purpose of this paper is to analyse Estonia's trade in goods with two countries in CEE, namely Slovakia and Slovenia, which joined the European Union in 2004, together with eight other countries including Estonia. This paper also proposes some measures to further increase the value of Estonia's exports of goods to Slovakia and Slovenia. For example, the promotion of export entrepreneurship, which is a subtype of international entrepreneurship (see Navarro-García and Peris-Ortiz, 2015), and cooperation of Estonian entrepreneurs/enterprises with their Latvian, Lithuanian and Slovenian counterparts in areas such as the aforementioned ones. The rest of this paper is structured as follows: Section 2 analyses Estonia's foreign trade in goods and services, while Section 3 analyses Estonia's foreign trade in goods only. Section 3 also lists some of the measures that should be taken by Estonia to further increase the value of its exports of goods to the world including Slovakia and Slovenia. One of these measures is to further increase Estonia's competitiveness. Section 4 analyses Estonian counties' foreign trade in goods, while section 5 analyses Estonia's trade in goods with Slovakia and Slovenia. Section 6 lists the main findings and some measures to increase the value of Estonia's exports of goods to the aforementioned countries.

2. ANALYSIS OF ESTONIA'S FOREIGN TRADE IN GOODS AND SERVICES

Similar to most other countries in CEE, including Slovenia, Estonia is heavily dependent on its trade in goods and services with the world (see Figure 1, and Müürsepp, 2014, pp. 28-29). There are many reasons for this such as Estonia's lack of natural resources, for example, fossil fuels, and the small size of Estonia's domestic market for goods and services. In 2013, the value of Estonia's trade in goods and services with the world amounted to euro31,993.7 million, 170.7 % of the value of Estonia's gross domestic product (GDP) and an increase of 3.2 % from the previous year. In the same year, the value of Estonia's exports of goods and services to the world amounted to euro16,132.2 million, 86.1 % of the value of Estonia's GDP and an increase of 3.5 % from the previous year. Furthermore, the value of Estonia's imports of goods and services from the world amounted to euro15,861.5 million, 84.6 % of the value of Estonia's GDP and an increase of 2.9 % from the previous year.

In recent years, Estonia's dependency on foreign trade in goods and services has increased (see Figure 2), mainly as a result of the further internationalization of Estonian enterprises.

3. ANALYSIS OF ESTONIA'S FOREIGN TRADE IN GOODS

This section analyses Estonia's trade in goods with the world. In 2013, the value of Estonia's trade in goods with the world amounted to euro26,097.3 million, 139.3 % of the value of Estonia's GDP and a decrease of 2 % from the previous year. …

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