Suchergebnisse

After joining the European Union, remarkable support has been provided to Estonian firms through government grants financed from EU funds, but so far it has not been systematically studied, which firms can get support from them. Current study analyzes all grants for firms financed from EU funds in Estonia in the period of 2007-2013. The paper outlines most supported firms based on activities financed and restrictions set on firms and application. The results indicate that some limitations make only a narrow range of firms eligible to get financial support. The grant measures in different implementing units providing grants vary a lot. Also, grants directed to fixed asset investments have more restrictions when compared with those directed to reimbursement of costs.

Although most countries have firm reorganization option in legislation (either as a separate law or part of insolvency code), the practice of successful reorganizations has remained modest. Reorganization law was introduced in Estonia in late 2008, but only a few firms have been successfully reorganized since. Derived from previous the article studies, what are the reasons for firm reorganization failure. From legal viewpoint, main causes are found to be that firms under reorganization do not submit reorganization plans to court and the preconditions for reorganization lapse. The financial ratios for successful and unsuccessful reorganizations are not significantly different according to independent samples median test. Unsuccessfully reorganized firms perform worse than successful ones in the year before reorganization year, but the opposite phenomenon occurs two and three years before reorganization year.

Whereas start-up firms are important engines of growth and face at the same time many impediments in the market, government aid to start-ups has been used extensively in different countries. In this article we have studied the performance of a small sample on new Estonian firms that received public start-up grant. For the analysis we use the rather unique data on the firms' plans for the 3 successive years after the start-up. The decisions to grant the start-up aid were maid based on these plans. The results indicated that while many firms could not meet their reported goals (in terms of turnover, profit and the number of jobs created) and more than half of the firms had tax arrears, the estimated labour taxes paid by these firms were much higher compared to the sum of the grant, thus indicating the positive net impact of grants on the state's fiscal position.

Government often faces decisions, which concern choosing between projects carrying different risk level and timing of cash flows. For calculating government real estate investment discount rate, we can apply social opportunity cost approach and derived from that the capital asset pricing model (CAPM). Several aspects have to be addressed when using CAPM: liquidity of assets, transaction costs and selection of appropriate comparative sector. Taking into account mentioned aspects, government discount rate for real estate investment in the long term investment horizon was found to be 8.9% according to CAPM. In case the lessee of real estate is government, then given discount rate overestimates payment risk level and actual discount rate should be between the price of loans taken by government and discount rate found using CAPM

The objective of current article is to view previous experience with real estate crises and taking into account such experience find suitable policy reactions to overcome the current Estonian crisis as smoothly as possible. Beside overall theoretical guidelines for overcoming the crisis, examples of Sweden and Ireland are viewed. The policy issues suggested for Estonia include some changes in tax laws, avoiding expansionary fiscal policy, making lending stricter and borrower responsible to higher extent, cooperation of different authorities to tackle problem of bad loans, initiating wage and price cut, paying more attention to exporting sector