SMEs and the business reality of criminality (the case of Estonia)

Abstract

Purpose

The aim of the paper is to identify key areas of criminality that affects SMEs and assess and link academic literature on criminality in relation to those areas with the empirical research. In effect to explore the business reality of the criminality environment and its significant aspects that have an impact on SME organisations and their managers and assist their decision making. Additionally, to consider the impact of Estonia's Soviet historical background and her EU membership criminal law obligations within such an evaluation.

Design/methodology/approach

This exploratory paper makes use of World, European and domestic surveys and primary criminal and business law sources as well as interviews from a business within the country assessed and a former Estonian police inspector. Together this gives an academic and grass-roots perspective for an assessment of the criminality reality for SMEs.

Findings

The investigation reaffirms the importance of SMEs within former economies from a Soviet background such as Estonia. It also emphasises the correlation between economic growth, business regulation and criminality and identifies the significance and “key” aspects of criminality for an SME. Furthermore, that Estonia's criminal law that affects SMEs is generally as it is written and that Estonia has a positive compliance with EU directives and regulations. It emphasises that overall a very positive progression has been made by Estonia within its criminal law environment which is considered stable and encouraging for SME activity. The recording of crime is relatively low by EU standards and has an effect, albeit small, on the reality for SMEs.

Practical implications

This research demonstrates the reality of the extent of criminality in Estonia and its positive progression in dealing with it. Corruption, a legacy from the Soviet period, is relatively small within the Estonian system as well as protection costs for an SME. There is, however, an acceptance of the existence of organized crime in Estonia although it is an under researched area. Some of the gaps within the World, European and domestic surveys are filled by the interviews although further evaluation is needed from other academics.

Originality/value

The research highlights the importance of the criminal law environment for SMEs within a relatively new EU member state. It provides an original grass-roots perspective on top of an academic assessment providing fuller information on the reality for SME activity. This is helpful for SME's operating or thinking of doing business in Estonia as well as providing indicators for countries from similar Soviet backgrounds as to their criminality reality.

Citation

Gordon Dickinson, P. (2014), "SMEs and the business reality of criminality (the case of Estonia)", Journal of Financial Crime, Vol. 21 No. 1, pp. 66-83. https://doi.org/10.1108/JFC-05-2013-0035