Table of Contents

Innovation and Institutional Embeddedness of Multinational Companies

Innovation and Institutional Embeddedness of Multinational Companies

New Horizons in International Business series

Edited by Martin Heidenreich

Multinational companies are crucial actors in a global knowledge-based economy, combining the advantages of global and locally coordinated production and innovation strategies with specific regional and national factors. This book questions how MNCs can best exploit institutionally embedded knowledge, explores the utilization of external institutionally embedded knowledge in corporate innovation processes, and addresses the challenges of embeddedness.

Chapter 12: Multinational Companies and the Production of Collective Goods in Central and Eastern Europe

Bob Hancké

Subjects: business and management, international business, organisational innovation, economics and finance, international business, innovation and technology, organisational innovation


1 Bob Hancké The comparative study of capitalism has, since the publication of the Varieties of Capitalism volume (Hall and Soskice, 2001), directed attention to market and strategic coordination as the critical variables that differentiate (as ideal types) liberal and coordinated market economies (LMEs and CMEs) – and beyond. Business coordination can help us to understand how France adjusted (Hancké, 2002) after failing to reinvent itself along CME lines (Culpepper, 2001). It is a useful perspective to make sense of the development of Latin American political economies (Ross-Schneider and Soskice, 2009) and of the economic organization of Mediterranean countries (Molina and Rhodes, 2007). In its ‘negative’ version, lamenting the absence of domestic business coordination – or at least some of its proto-institutional forms such as high trust or social capital (Stiglitz, 2000; Levy, 1999) – as a condition for economic upgrading, business coordination is an equally crucial variable in understanding divergent outcomes. All these views share the underlying idea that business coordination is exogenously given, usually handed down through history, or – conversely – destroyed under particular historical conditions. Hall and Soskice (2001) are relatively silent on the origins of coordination, and Hancké et al. (2007) explore these to some extent, but ultimately conclude in favour of the historical hypothesis. Whilst the argument in Feldmann (2007) is more dynamic – transition policies in Estonia had a networkdestroying and in Slovenia a network-preserving effect, two pathways that he causally relates to the absence or presence of business coordination in these countries – his analysis also underscores the importance...

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