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Contents

Preface 1

Section 1: SME Management and Entrepreneurship 5

About Family Enterprises Among Active Beef Animal Breeders by Maret Kirsipuu 7

SME Point of View on Logistics Development in the Baltic Sea Region – Survey Results from Eight Countries by Lauri Ojala, Tomi Solakivi, Hanne-Mari Hälinen, Harri Lorentz and Torsten Hoffmann 19

Problems of Implementation of Enterprise Resource Planning Systems by Arnoldina Pabedinskaitė 45

Quality Assurance with Six Sigma by Jānis Priede 56

Fixed Income Market as the Alternative Source of Financing for Latvian Companies by Natalja Tocelovska 66

Risk Management in the Context of Project Management by Juris Uzulans 75

Governance and Ownership: Practices in Estonia by Mike Franz Wahl 89

Training Concept for Owners of Small and Middle-sized Businesses under the Conditions of the European Union by Žanna Caurkubule, Viktors Morohins and Marina Urtane 103

Section 2: Macroeconomic Environment 113

Sectoral Structure of the Economy and the Position of Transition Countries in European Union by Jüri Sepp, Tiiu Paas and Diana Eerma 115

The Implementation of Macroeconomic Stabilization Reforms in Latvia: Analysis and Future Prospects by Česlavs Gržibovskis 130

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Do Benchmark Revisions Affect the Consumption-to-output and Investment-to-output Ratios in Germany? by Thomas A. Knetsch and Hans-Eggert Reimers 146

The Implications of Global Financial Turmoil for the Macroeconomic Environment in the Baltic States by Olga Ertuganova 162

Labour Markets in the EU-8 Member States – the impact of a „proper” structure by Zuzana Potužáková 171

The Role of the Quantity of Money in the Current Monetary Policy of the Eurosystem by Armin Rohde and Susan Kurth 185

The Real Estate Bubble and its Negative Impact on the Latvian Economy by Dmitrijs Smirnovs 194

Sectoral Structure in Countries Diverging by Socio-Economic Development by Katrin Tamm and Helje Kaldaru 202

Section 3: Institutional Development 219

Corruption in Public Procurement: The Communicative Aspect by Kristine Beinarovica 221

The Regulation of Sector-specific Markets in the Baltic Countries by Diana Eerma 233

The EU and Russia Economic Relations around the Baltic Sea by Rolf Eggert 247

Indicators of Corporate Default – An EU-based Empirical Study by Hazak Aaro and Männasoo Kadri 256

On an Underestimation of the Return Rate of the Sphare in the APT Model by Henryk Kowgier 275

Labour Motivation Models in the Context of an Economic Democracy by Fortins Egils, Fortins Guntis, Tatjana Muravska and Sergei Stacenko 289

Public Adminstration’s Customer Care by Romans Putans 300

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Role of Internationalization in the Development Banking Sector (case study of Poland) by Sławomir Smyczek and Karol Adamiecki 317

Section 4: Regional Development 337

The Importance of the Implementation of the Logistics Principles in the Organisation of Road Transport Operations by Dainis Ozoliņš 339

Promoting Universities’ 3rd Task – Recommendations for University-Business Cooperation by Anna Hirsikoski, Ari Koski and Gunnar Prause 351

ICT Usage and Needs in the Baltic Sea Region – A SME-oriented Survey by Eric Kron and Gunnar Prause 368

Human Resources in the Maritime Economy of the Baltic Sea Region by Monika Rozkrut and Dominik Rozkrut 383

Territorial Cohesion – Third Dimension of the Future European Union Cohesion policy by Līga Baltiņa 399

Regional Development and Cross-Border Co-operation in EU External Border Regions of Estonia by Urve Venesaar and Merle Pihlak 409

Section 5: Innovators and Integration of Technologies 425

Needs and Ways for Transnational Cooperation between Enterprises and Science by Rolf Hasse 427

Optimising Budget Execution by Modern Technologies by George Allen 441

Technological Spillovers and Diffusion in Economic Growth of the Baltic Sea Region: A Spatial Perspective by Jacek Batóg and Barbara Batóg 450

Technical Assistance as a Tool of Reform in a Transition Economy by Armands Eberhards 460

Bridging the Gap between Wiki and Knowledge Networks by Uwe Lämmel 476

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Integrated Management Systems in Latvian Companies, the Situation Today and a Look at Tomorrow by Iveta Mežinska 488

Knowledge Management, Innovation Transfer, and Regional Development by Gunnar Prause, Uwe Lämmel, Matti Tyynelä, Kimmo Salmenjoki 502

Section 6: Energy Markets and Climate-Energy Policy 511

Promoting the Use of Renewable Energy in the European Union and Latvia – Challenges and Opportunities by Daina Eberšteina 513

Critical Aspects of Remuneration and Organizational Culture: A Case Study of an Estonian Company in the Energy Sector by Pille Mõtsmees 525

Ukrainian Vector of Energy Efficient Mechanisms on the Scale of the Black Sea-Baltic Region by Larysa Sokil 538

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Preface This volume is the collection of the research papers presented, including the out-come of the discussions, at the 4

th Annual Baltic Sea Region International Con-

ference on „Baltic Business and Socio-Economic Development“ held between the 30th of September and 1st of October 2008 in Riga. The Conference was or-ganised by the Centre for European and Transition Studies at the University of Latvia in cooperation with Wismar Business School of Wismar University of Technology, Business and Design. The Conference has been supported by the Bundesbank, the Baltisch – Deutsches Hochschulkontor, and the Staatskanzlei Mecklenburg – Vorpommern. This gen-erous support has helped to bring together academics and specialists from busi-ness and socio-economic development areas for an in-depth exchange of their knowledge and experience. The aim of the Riga Conference was to provide a forum for discussions of issues related to the assessment of socio-economic de-velopment and business environment in the Baltic Sea Region (BSR), the eco-nomic and financial situation of SMEs, and new opportunities for international co-operation in the area of education activity. With more than seventy participants, the Conference represented a great platform for disseminating knowledge on socio-economic conditions for regional and business development as well as on solutions applied i in different economies. The objective was to provide the participants with a forum were they can work to establish contacts and promote active cooperation within joint projects and re-search networking. The Conference in Riga was the fourth meeting after the first Conference in April 2005 in Wismar, the second international Conference in September 2006 at the University of Szczecin, and the third international Conference which took place in June 2007 in Tallinn. The Conference Concept is a true joint work of the Bal-tic Sea Region higher educational establishments and their networks in coopera-tive research and project work at the European level. The Concept is also based on a rotating venue around the Baltic Sea Region which generates a Conference structure which is open to new ideas and regional themes. All four Conferences were similar in their focus on the following fundamental issues: − Entrepreneurship / SME-Management − Macroeconomic environment − Institutional Building − Regional Development − Transport and Telecommunication

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− Innovations and Integration of Technologies − Energy Markets and Climate-Energy Policy. A distinguishing feature of the Riga Conference was the Round Table on the is-sue of „Innovation: Does it Impact SMEs Development in the Baltic Sea Re-gion?“, which united in discussion the leaders of business organisations, repre-sentatives from responsible government institutions, and research and education specialists. During the discussion between the Round Table participants - Juris Kanels, Edmunds Belskis, Elina Egle, Steffi Groth, Lars Malmborg, Janis Stabulnieks, Andris Denins and Gunnar Prause- ideas have been exchanged on how to facilitate business activities and business education in the Baltic Sea Re-gion, Due to the success of this series Conferences, the organisers decided to plan the next meeting in Kalmar, Sweden in autumn 2009. Already at the Tallinn Confer-ence of 2007, a number of participants came from the regions outside the Baltic Sea Region, which stresses the importance of the Conference’s subjects in both the ongoing discussion format and their outcomes not only for the Baltic Sea Re-gion but also their relevance world wide. The Riga Conference revealed aware-ness of the importance of developments in the BSR for other countries outside the region. The Conference in Kalmar will highlight the importance of interre-gional cooperation with special reference to China. We gratefully acknowledge the support of the Organizing Committee as well as the Scientific and Editorial Committees of the Conference. We thank Professor. Dr. Andreas von Schubert from Wismar Business School, Wismar University for his efforts during the preparation phase of the Conference. We wish to thank the Riga team at the Centre for European and Transition Stud-ies of the University of Latvia, for their efforts to make this event efficient and enjoyable. We thank in particular Kate Nitina for providing vital communication links. The present Conference volume contains the most important papers of the Riga Conference 2008. The papers have been reviewed by the members of the Edito-rial and Scientific Committee consisting of Prof. Dr. Enn Listra, Tallinn Univer-sity of Technology, Professor Dr. Maris Purgailis, Prof. Dr. Hans-Eggert Reimers Wismar Business School, Prof. Dr. Jüri Sepp,University of Tartu, Prof. Dr. An-dreas von Schubert, Wismar Business School, Prof. Dr. Waldemar Tarczynski, Rector of University Szczecin, Prof. Dr. Urve Venesaar, Tallinn University of Technology, Prof. Dr. Joachim Winkler, Wismar Business School, and Prof. Dr. Katerina Zambrell, Baltic Business School, University of Kalmar and ourselves whom we want to thank for their work. The main editing and proof-reading was

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done by Rita Bravarska, Sinclair Bean, and Maria Lille whom we want to thank on behalf of all participants. Please enjoy the Conference book and we are look-ing forward to meeting you again in Kalmar.

Gunnar Prause & Tatjana Muravska