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TitleMultinationals and Transition: Business Strategies, Technology and Transformation in Central and Eastern Europe
Author
LanguageEnglish
File Size1.1 MB
Total Pages209
Table of Contents
                            Cover
Contents
List of Tables
List of Abbreviations
1 Multinational Strategy and Industrial Transformation
	From foreign direct investment to multinational strategy
	Strategic motivations of MNEs
	Industrial transition: from restructuring to sustained development
	Needs of industrial transition
	Creative transition
	MNE strategies and the phases of transition
	The surveys
	Aims and structure
2 Technology and Strategic Motivations for Investment in Transition Economies
	Introduction
	MNEs' motivations for CEE investments
	Sources of technology applied in MNEs' CEE operations
	Results
	Conclusions
3 Reasons for Investing in CEE, Technology and Strategic Evolution of Subsidiaries
	Introduction
	Reasons for investing
	Reasons for investing and sources of technology
	Results
	Conclusions
4 Market Orientation and the Strategic Development of MNEs in CEE
	Introduction
	Markets supplied
	Conclusions
5 Strategies of MNEs' Subsidiaries in Romania
	Introduction
	Classification of subsidiaries
	Reasons for investing in Romania
	Strategic roles of subsidiaries in Romania
	Markets supplied by subsidiaries
	Types of products produced
	Sources of technology used by subsidiaries
	Conclusions
	Appendix: process of classification of subsidiaries
6 MNEs' R&D and the Technological Transition in CEE
	Introduction
	Knowledge capabilities in transition economies: a resource and a constraint
	Incomplete and distorted national innovation systems in transition economies
	A brief assessment of the NSIs of CEE
	MNE as a technology catalyst in transition economies
	R&D strategy of MNEs and NSIs of transition economies
	MNEs' R&D in CEE
	MNEs' R&D in Romania
	Conclusions
7 Input Supply Linkages of MNE Subsidiaries in CEE: Dependence or Development?
	Introduction
	Foreign-owned firms, local input linkages and economic development: the debate
	Sources of inputs used by MNE subsidiaries in CEE
	Subsidiary-level influences on MNEs' purchasing patterns in CEE
	Sources of inputs used by MNE subsidiaries in Romania
	Conclusions
8 Conclusions
Bibliography
Index
	A
	B
	C
	D
	E
	F
	G
	H
	I
	J
	K
	L
	M
	N
	O
	P
	R
	S
	T
	U
	V
	W
	X
	Y
	Z
                        
Document Text Contents
Page 1

Multinationals and
Transition

Business Strategies, Technology
and Transformation in Central

and Eastern Europe

Julia Manea and Robert Pearce

Page 2

Multinationals and Transition

Page 104

MNEs’ Subsidiaries in Romania 93

Markets supplied by subsidiaries

We turn now to a more detailed aspect of the strategic perspectives of
the Romanian subsidiaries, in the form of the markets that they supply.
A question in the survey asked responding subsidiaries to evaluate the
degree of importance in their supply profiles of six market areas (Table 5.4).

Table 5.4 Importance of markets supplied by subsidiaries in Romania

Markets:
A Romanian market;
B Other Central and Eastern European markets;
C Western European markets;
D Non-European developed countries (North America, Japan, etc.);
E Newly-industrializing countries;
F Developing countries.

Note: 1Respondents were asked to grade each market being either (1) our only market, (2) a
major market, (3) a secondary market, (4) not part of our market. The average response was
calculated by allocating ‘only market’ the value of 4, ‘major market’ the value of 3,
‘a secondary market’ the value of 2 and ‘not a part of our market’ the value of 1.

Markets (average response)1

A B C D E F

By home country
USA 3.40 2.00 1.40 1.40 1.00 1.20
France 2.67 2.00 2.75 1.50 1.50 1.50
Germany 3.33 1.67 1.33 1.00 1.00 1.33
Italy 3.00 2.00 2.67 2.67 1.67 2.33
Other Europe 3.29 1.86 1.71 1.14 1.00 1.43
Other non-Europe 3.50 1.67 1.67 1.00 1.67 1.67

By industry
Food, drink and tobacco 3.75 1.25 1.25 1.13 1.00 1.25
Electronics & telecom. 3.33 2.00 2.00 1.00 1.00 1.00
Industrial machinery 3.00 1.80 2.40 1.80 1.60 1.80
Chemicals 3.00 2.67 1.33 1.67 1.00 1.67
Motors and components 2.67 2.33 3.33 1.33 2.00 2.00
Miscellaneous 3.00 2.33 1.75 1.50 1.00 1.50

By subsidiary type
Market-seeking 3.54 1.42 1.15 1.00 1.00 1.23
Efficiency-seeking 2.80 2.00 2.80 2.20 1.60 2.00
Market and efficiency-seeking 3.00 2.57 2.57 1.57 1.43 1.71
High knowledge-seeking 3.22 1.89 2.44 1.56 1.33 1.33
Moderate knowledge-seeking 3.43 1.86 1.43 1.29 1.00 1.14
Not knowledge-seeking 3.11 1.88 1.67 1.33 1.33 2.00

All respondents 3.24 1.88 1.88 1.40 1.24 1.52

Page 105

94 Multinationals and Transition

In line with the dominance of the MS motivation, the local Romanian
market emerges as decisively the most pervasive target of these subsid-
iaries� supply (an AR of 3.24 in Table 5.4). Whilst the Romanian market
emerges, in a definitionally-determined fashion, as being most relevant
for MS and hybrid subsidiaries, it is also quite prevalent in the supply
profiles of ES operations. Thus it seems that, as would be entirely logical,
ES subsidiaries whose dominant motivation is to nurture (in a way that is
a less obvious imperative for MS) low-cost and reliable quality as advan-
tages to be exercised in highly competitive external markets, are also
able (and presumably encouraged) to supply the host Romanian market
as a substantial spillover commitment. Though ES subsidiaries would
probably be reluctant to alter their mainstream (and well-established)
products for the local market (a source of competitive advantage that is
likely to be more readily available to MS), we have already suggested
that where they begin to activate local knowledge and creative potentials
it may be through the Romanian element of their supply profile that
they are best able to experiment with an original product-development
capability.

Though �other Central and Eastern Europe (CEE) markets� are of quite
widespread relevance (an AR of 1.88, and supplied by 63% of respond-
ents), their strategic positioning emerges as rather different from our
initial supposition. Thus the CEE markets are of very little importance
to MS subsidiaries, somewhat more so to ES and most strongly targeted
by the hybrids. Even though supply of these other emerging CEE markets
would conform to the logic of the normally perceived MS motivation,
it seems that when MNE subsidiaries are set up to supply the local
Romanian market there is no built-in presumption that they automatic-
ally extend their MS orientation into other adjacent CEE economies.
To do this does appear to need a demonstration of efficiency that, for
some reason, rarely emerges to a really convincing degree in the Romanian-
market-focused MS subsidiaries.

Thus subsidiaries that generate efficiency to mainly compete outside
the emergent transition regions (the pure ES operations) are rather more
effective in extending their activity into these other CEE markets. Ulti-
mately, however, it does seem that it is an ability to combine facets of
MS and ES behaviour that proves the most decisive capability in supply-
ing these other CEE markets from Romania, with hybrids clearly the
most effective (the CEE market being the only one where hybrids are
the most committed suppliers).

In terms of average response (Table 5.4) Western Europe equals CEE
in relevance as a market for Romanian subsidiaries (that is, a value of

Page 208

Index 197

regressions, 24�5, 27, 43�8, 65�71,
74, 77�82, 165�72

research and development (R&D)
R&D collaborations, 4, 13, 43,

44, 47, 50, 63, 64, 69�72,
101, 102, 128, 136�8,
140, 144�6, 149, 150,
171, 172, 183

R&D economies of scale, 135,
143, 147

R&D funding, 117, 120, 122,
128, 136, 143

R&D institutes, 110, 114, 118,
128

R&D networks of MNEs, 121,
127, 130, 143, 147

R&D organization, 135, 136, 143
R&D strategy, 17, 108, 120, 123

research and development of
MNEs in CEE

influences on, 108, 122, 123,
125�31, 138�41

location of, 123, 124, 127, 130,
133, 134

reasons for not having, 133�6,
141�4, 184, 185

types of laboratory, 121�3,
127, 131�3

risk, 6, 12, 14, 170, 171
Rojec, M., 74, 76, 84
Romania, 21, 22, 26, 27, 59,

85�107, 125, 138�47, 183
Ronstadt, R., 149
Rugman, A., 1
Russia, 59, 118, 124, 148

Schwartz, A., 84
science, 3�5, 8, 12, 57, 58, 60,

62�4, 71, 89, 102, 108, 109,
112, 113, 115, 117�21, 123,
126�30, 132, 135, 138, 140,
143, 147, 149, 183�6

scientific wage rates, 125�7,
140, 146

Scotland, 153
Sharp, M., 117, 118, 148
Shell, 117, 118, 148
Siemens, 117, 118, 148
Singh, S., 27, 125, 127

skills, 2, 3, 8, 9, 12, 13,
15, 32, 57, 59�63, 70,
71, 81, 82, 89, 109, 113,
118, 185, 186

Sleuwagen, L., 59
Slovakia, 59, 84
Slovenia, 84
Spain, 116
spillovers, 151�3, 184
Stone, I., 177
Strange, R., 178
strategic motivations, 3�5, 11,

15�17, 28�36, 77, 85�7,
90�2, 154, 165�8

subcontracting, 76, 84, 158
supply networks, 4, 5, 11,

13�17, 39, 47, 49, 56,
58, 61, 72, 73, 76, 84,
89, 95, 97, 103, 155,
161, 164, 170, 171,
174, 176, 177, 184

support laboratories (SL), 121,
122, 127, 131, 140

sustainable development (phase
two), 5, 7, 8, 10�12, 14,
16�18, 31�4, 37, 49, 50, 53,
71, 75, 76, 83, 102, 114,
121, 153, 181, 186

Svetlicic, M., 74
Sweden, 115, 125

tacit knowledge, 4, 12, 13, 28,
42, 50, 63, 65, 70, 110, 111,
131, 140, 171, 184

Taggart, J.H., 7, 74
Taiwan, 116
tastes, 9, 39, 98, 99, 133
Tavares, A.T., 59
technology

dependency, 17, 37, 50, 56,
92, 141, 153, 161, 182

sources of, 11, 28, 36�48, 59�74,
99�102, 149, 169�72, 180

transfer, 6, 8, 15, 16, 32, 37, 40,
44, 48, 50, 118, 121, 159,
160, 176, 177

training, 5, 12, 42, 113, 118,
158, 185

Turok, I., 155, 160, 178

Page 209

198 Index

United Kingdom, 153, 177, 178
United States of America, 115,

148, 149, 177, 178
universities, 12, 43, 48, 50, 63,

69�71, 101, 128, 130, 137,
140, 144, 149, 183

Vahlne, J.E., 107
Venables, A., 74

Wales, 153
Wiedersheim-Paul, F., 107

Williams, K., 177
Wong, P.K., 159

X-inefficiency, 10, 15, 16

Yamin, M., 1
Young, S., 59, 149, 178

Zeneca, 117
Zysman, J., 84

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