The Role of Matching in the Foreign Market Entry Process in the Baltic States

The transition economies in Central and Eastern Europe are emerging as interesting target markets for West European companies. In spite of the still looming threat of conflicts and chaos, the notable economic growth that is taking place in some of the former socialist countries has triggered interaction, particularly across the Baltic Sea. In March 1992, the countries surrounding the Baltic Sea established the Council of the Baltic Sea States (CBSS, 1993). One of the long-term objectives of this co-operation is a linkage between the European Union and the non-member countries of the region. The Nordic countries in particular have demonstrated an increasing interest in trade relations and in making direct investments in Estonia, Lithuania and Latvia (Buckley and Ghauri, 1994).Investments by foreign companies are vital for the Baltic countries. Foreign direct investments can act as a powerful catalyst for economic change in the transition from a centrally planned to a market economy. Foreign companies bring technology, management know-how and access to foreign markets. Hundreds of such companies are investing in the region, and the number of projects with foreign participation is expanding rapidly