The contribution and some characteristics of cross border cooperation for moldovan smes (the case of cooperation with Romania)

Author:Elena Aculai/Adela Bulgac
Position::Institute of Economy, Finance and Statistics Chisinau, Moldova

In the paper, some characteristics of cross border cooperation of Moldovan SMEs are examined - types of cooperation, problems and preferences in choosing foreign partners, impact of cross border cooperation on business and regional development. The stress is made on the cooperation with Romania. Content of the paper is based on results of the international research project "Cross-border... (see full summary)

Introduction Limited possibilities of SMEs in transition economies, along with development of the process of internationalisation, where more actively smaller sized enterprises are implied, determine entrepreneurs to seek new directions of business development and realise new strategies directed out of borders of their country. An additional opportunity for enterprises from border regions could serve such a form of external economic activity as cross border cooperation (CBC), i.e. the cooperation between enterprises from border regions of neighbour countries. For Moldovan SMEs that confront serious barriers in their activity (difficult access to all types of resource, narrow internal market, etc.), the CBC could be of special importance. We should mention that Moldova has a small territory and among its 32 districts more than 20 have external borders. But, due to certain circumstances only few Moldovan businesses cooperate with enterprises from neighbour countries. In the paper, results of the international investigation realised in 2005 - 2007 and oriented to identifying some essential characteristics of CBC of Moldova, Ukraine and Belarus with the EU countries and with Romania - at that moment being a candidate country, are presented. In the paper, some characteristics of CBC are examined - types of cooperation of SMEs, preference in choosing partners from Romania or Ukraine, problems of partners' search, interest of both sides in CBC, influence of CBC on business development and its contribution to regional development. The role of cbc: literature review In order to define the CBC and elucidate different aspects of this phenomenon, several investigations have been taken during last decades in the world. Some researchers see the CBC as a modern regional development practice. While traditional regional development practices originally intended to solve regional discrepancies within national boundaries, CBC is new in that it involves foreign, national and regional governments in addition to supranational institutions (Friedmann and Weaver 1979, cited by Enokido 2007). And implication of different level institutions assumes avoiding of discrepancies between regions which don't have anything in common with national borders. This aim is of a permanent actuality in the EU that uses, including, the CBC for the realization of European integration of countries from the continent. Thus, the European Commission in the Madrid Convention offers an official status to the CBC defining it as "any concerted action designed to reinforce and foster neighborly relations between territorial communities or authorities within jurisdiction of two or more Contracting Parties" (European Commissions 1980). The importance and relevance of CBC to European integration is mentioned by Grix (2001) who sustains that "the act of 'knitting' together historically antagonistic neighboring states at national, sub-national and local levels has been particularly successful in western Europe, where a myriad of Euro regions function as channels for, and facilitators of, formal and informal interstate cooperation and exchange". The EU, within its policies established several instruments of CBC promotion. Among them the EU established the concept of the Euro region, "which is a form of transnational co-operation structure between two or more territories located in different European countries" (Smalbone 2007). Besides Euro regions, there have been launched the INTERREG programmes that aims to promote integrated regional development between neighboring border regions, including external borders, by developing cross-border economic and social cooperation through joint strategies and development programmes" (Smallbone 2007). In the EU the CBC has been one of the key factors in the process of integration and has been seen by Central and Eastern European countries that have aspired to accede to the EU as a model of integration. In this sense, the EU supports the effort of these countries through launching of a CBC instrument with regard to its external borders - programmes such as PHARE and CARDS that have funded cross border cooperation projects (Smallbone 2007). Since 2007, Moldova, being an immediate neighbor of the EU, can facilitate from some of these instruments as well. Although declared by national authorities of special importance, the problem of CBC has been little investigated in the country. At the same time, few activities that could lead to the awareness by population of CBC advantages are taken. In this sense, the CBC of economic agents from border regions as one of the main aspects of CBC, which directly determine regional development has a decisive role. Research methodology The material of the paper is based on results of the international research project "Cross-border Cooperation and Partnership in selected NIS countries and the Consequences of EU-Enlargement: Fostering Entrepreneurship in the Ukraine, Belarus and Moldova", elaborated by a research team from 5 countries during 2005-2007 years with the support of INTAS 04 79 6991. A determinant contribution to discussing...

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