INTRODUCTION Due to the establishment of the Internal Market the international envir onment of small and medium-sized firms in Europe is changing rapidly. Since January 1993, the twelve EC countries form a common market in which nearly all physical, technical and fiscal trade barriers are faded away. The creation of the common market intensively influences the development of market conditions and competition today and in the near future. On the one hand, competition will get stronger because foreign competitors can now enter the domestic market without com plex formalities. On the other hand this also goes for the domestic firms, which means that it is much easier to start export activities and to enter upon foreign markets. Uniformity in product requirements and less time consuming border controls will lower the cost of international trade.