Foreign banks increase the social orientation of Estonian financial sector

Reconstruction of Estonian banking system started twenty years ago. Estonia built up for the market economy a banking oriented financial sector, which is centred on commercial banks. During the two decades less than ten banks remained from more than 50 licensed commercial banks, the rest were not able to continue independently, they merged or have failed. The bad result of such kind of development was also the excessive concentration of banking. Banking sector in Estonia during the transition period was opened to the invasion of foreign banks due to the openness of the economy and excessive risks taken. Two banking crises, selected quickly the very limited number of prosperous banks, and the major commercial banks went into the ownership of Scandinavian banks. The qualitative effects of foreign banks’ entry into the Estonian banking market were new features of competition in banking market and transfer of various knowhow from foreign banks. Better liquidity risk management techniques, information systems, credit policy and personnel policy transfer from foreign banks supported banks to have high profitability and low credit losses rates. These directions are noticeable also by quantitative analyses of banking market development. The takeover of main commercial banks by the large Swedish and Finnish banks was one of important factors in the gradual increase of the social orientation of Estonian banks however the ideas of social responsibility of enterprises are especially popular in Scandinavia. In our paper we analyse also Estonian banks’ practices of supporting the social development of Estonia. --

Valuing All Languages in Europe

The VALEUR project (2004-2007) took as its focus the 'additional' languages of Europe. These are defined as all languages in use in contexts where they are not 'national', 'official', or 'dominant' languages. They include 'migrant' languages, 'regional/minority' languages, sign languages and 'non-territorial' languages of diasporas such as Yiddish and Romani. The project team brought together a range of expertise in sociolinguistics and language pedagogy, planning and research from Finland, Netherlands, Poland, Spain and the UK. We took as our starting point Council of Europe policies on plurilingualism and the desirability of promoting linguistic diversity both for individual citizenship and for social cohesion in Europe. Our aim was to map provision for additional languages in Europe, in a more systematic and inclusive way than ever before. We looked at provision at school level for different languages in different contexts in order to identify good practices to be shared. In order to achieve our objectives we drew on the good will and enthusiasm of workshop participants, who provided a wealth of information and insights from 21 of the Council of Europe member states. Our work is not definitive: its purpose is awareness-raising and to stimulate further activity to support the learning of all Europe's languages

Extracting Leading Indicators of Bank Fragility from Market Prices – Estonia Focus

Banking reform has proved to be one of the most problematic elements of economic transition in central and Eastern Europe. Therefore the paper considers the development of the Estonian banking sector and derives individual banks´ fragility scores during transition. To this end we use option-based tools and equity prices to estimate distance-to-default measures of banks´ distress probabilities. Overall, the results suggest that market indicators are moderately useful for anticipating future financial distress and rating changes in transition economies. The implication for an effective supervisory framework is to use a plurality of risk scores when assessing bank vulnerability.banking, financial stability, bank fragility, options, Estonia

7th International Scientific Conference, Tartu, 16-17 November 2006 "Entrepreneurial finance and financial environment" : proceedings

http://www.ester.ee/record=b2236976*es

Nordic small countries in the global high-tech value chains: the case of telecommunications systems production in Estonia

In this paper we focus on the electronics industry, and more specifically on the production of telecommunications systems, which is characterised both by very rapid growth of the global trade and very high ratio of R&D investments in the sales revenues (Moncada-Paternoo-Castello et al 2010). More specifically, we analyse the distinctly different development paths of the three major telecommunications systems producers in the Nordic countries: Ericsson, Elcoteq and Skype. Ericsson was established in 1876, and has been a well-known brand name for decades. By contrast, Elcoteq grew from a small company into a global multinational corporation in less than a decade only in the 1990s. As a global company, Skype is still less than ten years old, but it facilitates today more international calls than any other telecommunications operator on the planet.

Tacit Web: Entrepreneurial Discovery, Institutional Complexity and Internet Diffusion

This dissertation investigates how institutional frameworks and entrepreneurial discovery processes condition internet diffusion. While internet and internet-based technologies have received considerable scholarly attention, the dissertation emphasizes tacit elements in understanding internet diffusion. In order to do so, it incorporates perspectives on insttitutional complexity stemming from interactions of formal and informal institutions and different institutional logics. Empiral part consists both macro level comparisons of Estonia and Slovenia as well as micro level analysis of internet diffusion processes within Estonia. Estonia and Slovenia are selected for comparison because of considerable variance in insitutional frameworks. At the same time, both countries are relatively small and members of the European Union. This allows to focus on specific institutional configurations and path-dependencies in constraining and enabling the diffusion of internet. I find that internet is diffused more extensively and intensively in Estonia. Different socio-economic groups use more sophisticated online services in Estonia than in Slovenia. Once specific institutional configurations in general and in the telecom sector in particular are considered then it emerges that insitutional frameworks in Estonia have been more facilitative of entrepreneurial discovery processes over time. As a result, supply and demand for innovative online services in Estonia is greater than in Slovenia. After comparative perspective on two countries, the dissertation proceeds to analyze specific cases of online initiatives in Estonia such as internet banking and internet voting. Examination of outcomes shows how some of these initiatives have been successful and created reasons for adoption and use of internet on the individual level leading to a greater diffusion on macro level. My analysis demonstrates that positive outcomes have often been unintended result of experimentation through the process of entrepreneurial discovery within the context of institutions and path-dependencies. Evidence for this finding is bolstered by study of heterogeneous cases of various ICT initiatives. By emphazing institutional complexity and policy heterogeneity, the dissertation illuminates and explains the tacit nature of internet diffusion in a specific context of Estonia. This implies that Estonia has followed a unique developmental trajectory which cannot be generalized and transferred to other countries

Ettevõtete innovatsioonistrateegiate dünaamika ja seosed avaliku sektori toetustega

Innovatsiooni peetakse õigustatult majandusarengu võtmeks. Innovaatilisuse suurendamiseks toetatakse eraettevõtlust riikliku abiga, millest tulenevalt tekib küsimus – kas toetused tõepoolest muudavad ettevõtete käitumist? Doktoritöö keskendub ettevõtete innovatsioonistrateegiate dünaamikale ning seostele ettevõtlustoetustega. Viimased võivad olla näiteks investeeringute tegemiseks, teadus- ja arendustegevuseks, innovatsioonide turule toomiseks, turundusplaanideks, jne. Eesti näitel on hinnatud ettevõtete innovatsioonistrateegiaid, mis toetuvad ühistele sisenditele. Olgu selleks koostööpartnerite valik, valikud investeeringute tegemisel või teadmiste allikad. Selgub, et ettevõtted on võimelised oma innovatsioonistrateegiat muutma tihti, vajadusel mõne aasta jooksul. Siiski on tegemist astmelise arenguga, kõigepealt tulevad lihtsamad strateegiad ja alles seejärel keerulisemad. Seosed ettevõtlustoetustega ei ole ühtsed. Näiteks investeeringutoetustega ettevõtted võtavad suurema tõenäosusega kasutusele lihtsamad innovatsioonistrateegiad. Teadus- ja arendustegevusele suunatud toetustega ettevõtted aga juba keerulisemad strateegiad. Töötajate oskuste arendamisele suunatud toetustega ettevõtted püsivad kauem innovaatilised. Siiski on mitmed toetuste tüübid, kus pole selge, et nad üldse oleks seotud innovatsioonistrateegiatega. Doktoritööst ilmneb, et ettevõtlustoetused peaksid olema disainitud täpsemaid tegevuspõhiseid sihtgruppe silmas pidades. Innovatsioonistrateegiates ei tasu oodata suuri hüppeid vaid järkjärgulist arengut. Kuid oma sihtgrupis peaksid nad olema piisavalt väljakutsuvad, et toetada strateegiaid mis on kogu majandusele kasulikud – avatud, koostööaltid ja teadmuspõhised.Innovation has been on the forefront of public policy as a panacea for economic ills for a long time. Governments on various levels support the creation and diffusion of innovations in private firms with public money. It is justified to ask – does it change firm behaviour? The thesis analyses whether firms change their innovation strategies if they have received business support. The support can be in various forms, such as financial aid to investments, training and skill development, developing marketing plans and exporting plans, innovation and R&D assistance, and so forth. Based on the Estonian example, some commonalities can be established about innovation strategies. Firms adopt different styles of creating innovations relying on diverse inputs, such as their cooperation partners, investment choices or information sources. Firms change between different strategies often and with a short time-frame, in less than two years. Meaning that with proper incentives, it is possible to influence firm behaviour without long lags. However, shifts between strategies show incremental evolution. Firms without any innovation strategies develop simple strategies first, followed by more complex strategies later. The relationship with business support is not uniform. Support for physical capital investments is positively related with simple innovation strategies. Support for innovation and R&D activities is more related with complex innovation strategies, based on open innovation strategies and cooperation with universities. Firms with training and skill development instruments are less likely to stop being innovative at all. Business support should adapt to the proper target audience. Leap-frogging might have limits if firms are very inexperienced. In addition, policy instruments ought to be demanding for firms. Innovation policy instruments should be challenging enough to create strategies that we wish to promote — cooperative, open and R&D intensive.https://www.ester.ee/record=b530632