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From Communists to Foreign Capitalists

The Social Foundations of Foreign Direct Investment in Postsocialist Europe

Nina Bandelj

Publication Year: 2011

From Communists to Foreign Capitalists explores the intersections of two momentous changes in the late twentieth century: the fall of Communism and the rise of globalization. Delving into the economic change that accompanied these shifts in central and Eastern Europe, Nina Bandelj presents a pioneering sociological treatment of the process of foreign direct investment (FDI). She demonstrates how both investors and hosts rely on social networks, institutions, politics, and cultural understandings to make decisions about investment, employing practical rather than rational economic strategies to deal with the true uncertainty that plagues the postsocialist environment.

The book explores how eleven postsocialist countries address the very idea of FDI as an integral part of their market transition. The inflows of foreign capital after the collapse of Communism resulted not from the withdrawal of states from the economy, as is commonly expected, but rather from the active involvement of postsocialist states in institutionalizing and legitimizing FDI. Using a wide array of data sources, and combining a macro-level account of national variation in the liberalization to foreign capital with a micro-level account of FDI transactions in the decade following the collapse of Communism in 1989, the book reveals how social forces not only constrain economic transformations but also make them possible.

From Communists to Foreign Capitalists is a welcome addition to the growing literature on the social processes that shape economic life.

Published by: Princeton University Press

Title Page, Copyright Page, Dedication

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pp. i-vi

Contents

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pp. vii-viii

List of Tables

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pp. ix-x

List of Figures

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pp. xi-xii

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Acknowledgments

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pp. xiii-xvi

...The bibliographical description given below (p. 341) for the Almon imprint also fits those copies bearing the Robinson and Roberts imprint, which are nothing more than the sheets printed for Almon with canceled half-title and title pages. Sheets H-L in volume one and the sheets in volume two contain a large scroll watermark. As expected, the original...

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Prologue

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pp. xvii-xx

...Twenty-five years ago, I was an enthusiast, not only because I was younger. Everyone had work, no matter what. In our firm, we organized our activities based on a five-year plan of production issued by the central state authorities controlled by the Communist Party.We had no idea what a firm strategy is, and even less...

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Chapter 1 Social Foundations of the Economy

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pp. 1-28

...This book is about the confluence of two grand processes of economic transformation that define our times: the transformation from command economies of state socialism to liberal market capitalism, and the intensification of transnational flows of capital as the defining characteristic of contemporary economic globalization...

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Chapter 2 From Socialism to Postsocialism

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pp. 29-64

...separated the Eastern socialist part from the Western capitalist part of Berlin will forever remain a symbol of the collapse of Communism, the lifting of the Iron Curtain, and the end of the Cold War. The concrete( ness) of the BerlinWall and its swift destruction promote the illusion that social change is about the efficient...

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Chapter 3 Institutionalization of FDI in Postsocialism

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pp. 65-102

...structure of economic organization, which will emerge as soon as the (unnatural) control of the Party state is abolished. In the absence of state intervention, self-interested market actors will be free to exchange and maximize utility. As one observer stated, “If given the presence of rational, self-interested actors and the absence of government...

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Chapter 4 Cross-Country Patterns in FDI Flows

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pp. 103-130

...1980s, many of those who wished to escape the political turmoil of the last decade of the Communist rule in Poland emigrated to Polonia. Some of these immigrants were university-educated men and women who had been involved in the Solidarity movement. Even if their involvement had been minimal, they found little professional opportunity in their homeland after the Communist...

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Chapter 5 Embeddedness of Organizational FDI Attempts

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pp. 131-167

...to the inadequacy of traditional accounts of FDI, which emphasize economic efficiency. Standard economic and political risk indicators do not predict well which postsocialist countries receive more and which less investment. Rather, analyses of cross- and within-country variation in FDI bring to the fore the relevance of institutions, networks...

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Chapter 6 Uncertainty and the Practice of FDI Transactions

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pp. 168-195

...address in any situation. Sometimes finding answers may be extremely difficult. Just imagine Mr. Investor, arriving at the airport in Sofia or Ljubljana, Budapest or Riga in the early 1990s, during “a very chaotic time,” venturing into a “loose environment [with] no infrastructure for investors,” trying to understand Lithuanian or Romanian, or the legal system, which “is changing so rapidly it is difficult to keep abreast of all the changes,” not knowing...

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Chapter 7 Embedded Economies

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pp. 196-220

...globalization. Much has been written and speculated about the complexity and significance of these two transformations. It is surprising, however, that we know little about how they shape each other. How are places undergoing a fundamental social, economic, and political transformation affected by global flows of commodities, capital, and culture...

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Epilogue

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pp. 221-222

...he had run out of the energy needed to keep up with the fast pace of a global business world, the pressures on his firm to be competitive, and the hard decisions of a postsocialist manager’s everyday worklife. A possibility that he might be sent to set up a production facility in China was not a welcome challenge but a heavy burden...

Appendix on Method and Data Sources

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pp. 223-242

Notes

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pp. 243-254

References

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pp. 255-290

Index

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pp. 291-303


E-ISBN-13: 9781400841257
E-ISBN-10: 1400841259
Print-ISBN-13: 9780691129129
Print-ISBN-10: 0691129126

Page Count: 324
Publication Year: 2011

Edition: Course Book