ABSTRACT
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.
