Entering central and eastern Europe: Risks and cultural barriers

Scholars have argued that the slow pace of Western investment in Central and Eastern Europe may be caused by two entry barriers: cultural influences and high international risks. This study examines the influence of culture and international risks on the entry mode choices of Western European firms entering Central and Eastern European markets since the fall of the Iron Curtain in 1990. Evidence from 227 Western European companies shows that, for firms entering Central and Eastern Europe, investment risk perceptions are important determinants of mode choice while culture and contractual risk have only minimal influence. Managerial implications are also discussed. © 1998 John Wiley & Sons, Inc.     

Eastern-Western supplier-customer relationships in agricultural machinery industry: results of an empirical investigation in the Czech Republic,Hungary, Romania,Ukraine, and Germany

International trade between Germany and the young reform states in Central and Eastern Europe is growing rapidly. Germany is the most important trading partner for nearly all of the Central and Eastern European countries. Nevertheless, there are relatively few empirical studies concerning purchasing activities of western manufacturers in Central and Eastern Europe. Especially the characteristics of successful relationships between Central and Eastern suppliers and their western customers have not been addressed. This paper presents results of a survey carried out in the Czech Republic, Romania, Hungary, Ukraine and Germany. The research reported, contributes towards answering the following research questions. (1) What are the reasons for establishing Eastern-Western supplier-customer relationships? (2) What are the characteristics of German customers buying in Central and Eastern Europe? (3) Which attributes are prominent by Eastern suppliers? (4) What are the ingredients of a successful supplier-customer relationship?The survey showed that many successful relationships between German manufacturers and Central European suppliers have been established. The importance of these relationships for both suppliers and customers is shown by the average share of materials by value bought in Central and Eastern Europe, the high specificity of the purchased materials, the types of contracts employed, and the extent of support activities. Furthermore, the study has identified the requirements and numerous attributes of successful Eastern-Western supplier-customer relationships.     

The Emerging Securities Market in Russia

Abstract

This paper examines the motivations of foreign firms for investing in the Eastern and Central European countries, based on a synthesis of surveys of investors and on anecdotal observations. The findings of this examination are used as a framework within which policies towards FDI are formulated and evaluated. It suggests that the efforts of Eastern and Central European governments should be directed towards the improvement of the conditions which affect investment driven by market, export and efficiency seeking motivations. These are the areas in which the region seems to have large potential as host for FDI that has not fully materialized yet.     

Foreign investor strategy development in the central and eastern European context

Investment conditions in the transition economies of Central and Eastern Europe favor long-term strategic investments. Increasing competition pressures in the saturated West European beer markets coupled with shrinking demand challenged Interbrew SA, Belgium to enter the emergent prospective markets of Central and Eastern Europe by the acquisition of former state-owned enterprises. The study of Interbrew's case shows the linkages existing between investor internationalization strategy, motives, strategy implementation, and adaptation in the highly volatile markets of Hungary and Bulgaria. This case represents a good example of slow reactive strategy development in the Hungarian environment leading the investor to the loss of its first mover advantage. Using similar motives for its acquisitions in Bulgaria, Interbrew has successfully implemented a proactive adaptation of its initial Central and Eastern European strategy to the Bulgarian environment. The lessons from the case can be used by foreign investors to increase their chances for success in FDI acquisition in transitional economies. © 1999 John Wiley & Sons, Inc.     

Financial integration and currency risk premium in CEECs: Evidence from the ICAPM

This paper aims to study the Central and Eastern European Countries' (CEECs) dynamics of financial integration in the euro area with the prospect of their integration into the European Monetary Union. Our empirical analysis is based, successively, on a MGARCH model with time-varying correlations, a state-space model and a Markov-switching model. The results show that financial integration (i) is not perfect but is increasing and (ii) is linked to currency stability. The growing financial integration in 2007–2009 seems to be rather the result of the shock propagated by the global crisis.     

EU Enlargement Creating a Framework for the Eu-Russian Rapprochement

Abstract

The Eastern enlargement of the European Union has substantial influence on EU external policy and its relations with non-EU countries, including Russia. In this situation, Russia's main concern is to avoid the creation of new dividing lines after the enlargement. This paper will argue that instead of dividing Europe, the EU enlargement would create a framework for further cooperation and eventually rapprochement between the EU and Russia. Therefore, Russia would be able to benefit from this process. The paper will analyse the consequences of the EU enlargement for Russia and examine the main political concepts determining directions of this rapprochement between the European Union and Russia: New Neighbourhood, Common Spaces and Eastern dimension.     

Trade and migration flows between some CEE countries and the UK

The recent enlargement of the European Union (EU) has enhanced interest in the causes and also the consequences of migration between Central and Eastern European (CEE) and Western European countries. This paper considers the possibility that some of these consequences make themselves felt in the trade flows between migrants' countries of origin and destination. Using a panel of data covering a number of CEE countries between 1996 and 2003, we employ an augmented gravity model to examine the effects of immigration from these transition countries on their bilateral trade flows with the UK. We pay attention to a number of issues that have been raised within the literature on gravity models. We find evidence that migration positively enhances the bilateral exports of the migrants' home country; however, there is less (but some) evidence that the imports from their destination country are also enhanced.     

河北省与中东欧国家中医药合作研究

近年来,中医药逐步走出国门,走向世界,在应对全球新型冠状病毒的防控阻击战中发挥的独特作用,更是让中医药在全球得到广泛关注。随着中国同中东欧国家在中医药领域交流合作日益深化,河北省应借力"一带一路"平台寻求与中东欧中医药合作的新机遇。首先介绍河北省与中东欧国家中医药合作现状,然后点明双方中医药合作具有潜力大且政策支持力度强的有利条件,进一步分析出双方中医药合作面临的问题:中医药国际标准不健全、专业复合型人才短缺、合作国家不均衡且合作模式单一,进而为促进河北省中医药产业快速发展,推动与中东欧国家深化合作提出相应的对策建议。     

EU enlargement and labour markets in the CEECs

The implications for labour markets are central to any political and economic evaluation of EU Eastern enlargement. The resulting new levels of unemployment and of wages will have direct effects on social welfare in the acceding countries as well as in the present member states of the EU. Furthermore, employment and wages are substantial factors of political stability in the central and eastern European countries (CEECs). The following paper analyses the present situation on the labour markets in the CEECs and discusses the effects of their reintegration into the Western European system and the resulting implications for labour market and wage policy institutions. Helpful comments by participants of the 2nd convention of the CEEISA “Globalisation of International Relations—Implications for Central and Eastern European Countries”, Warsaw, 15–17 June 2000, and of the 4th International IMAD Conference “Institutions in Transition”, Portoroz (Slovenia), 23–24 June 2000, are gratefully acknowledged.     

Eastern European marketing systems and Western marketing research voids: A research agenda

Starting with détente, there has been a marked improvement in North American trade with the U.S.S.R. and other Eastern European countries. This trend is predicted to continue at an accelerating rate in the years ahead. Despite this, trading and business systems of these countries are not likely to alter much. In most cases, planned purchases are going to continue, although the intensity may vary. Public policy makers in these countries decide well in advance what type of products or services they are going to purchase, because their purchases must conform with the goals of the annual foreign trade plan and the allocations of foreign exchange available for that particular purchase.Most aspects of Eastern European markets and marketing practices are not well known by North American company managers dealing with these countries. In most cases, lack of information about these markets often leads to misunderstanding and, hence, lost opportunity. The purpose of this article is to determine the critical research voids in an effort to facilitate the expansion of North American-Eastern European trade. To this end, a four-step procedure is proposed to pinpoint areas of research for immediate attention.     

Monetary policy spillovers and currency crisis in comparative perspective: East Asia before the 1997 crisis and Eastern Europe after tapering

This paper estimates the possibility of currency crisis in Eastern Europe that can be triggered by monetary policy change in the key currency countries, such as tapering measure. We examine the crisis possibility in the five Eastern European nations—the Czech Republic, Poland, Hungary, Bulgaria and Romania—by performing a comparative analysis with East Asian countries before the 1997 currency crisis. For the analysis, we estimate how much the exchange rate deviates from the estimated equilibrium exchange rate, as well as the synchronicity of currency value towards some of the key currencies by creating market pressure index. The results can be explained in two ways. First, the market pressure in the Eastern Europe after 2012 is smaller than they were in East Asia before 1997. The crisis possibility especially intensifies when more the exchange rate deviates from the equilibrium value. Second, the monetary policy change in the key currency countries does not greatly affect the crisis possibility in Eastern Europe when their local currencies have the strong synchronisation with euro. Therefore, Eastern European countries show strong synchronicity towards the euro, so the crisis possibility may be alleviated if the Eurozone continues its expansionary monetary policy.     

EU accession: Negotiating “environmental dumping”?

“Environmental dumping” is a concern frequently raised in discussions on the potential risks involved in the eastern enlargement of the European Union¹ (EU).² There is a general concern that the Central and Eastern European accession countries may be neither willing nor able to fully apply the EU’s environmental acquis communautaire, the body of Community environmental legislation, once they have joined the EU. As a result, these countries would benefit from a competitive advantage when selling their goods on the Internal Market. This article asks whether, and in which specific cases, such concerns may be justified.     

Mean reversion of inflation rates in seven Eastern European countries: An application of a fourier quantile unit root test

This paper applies recently developed Fourier quantile unit root test to investigate time-series property of inflation in seven Eastern European countries. This method combines the quantile unit root test with smooth unknown multiple breaks through Fourier function, and has good size and power when the data follows heavy tailed distribution. Our results show that the inflation rates are stationary within each quantile for Czech Republic, Bulgaria and Lithuania, while the other four countries contain a unit root within some quantiles. We also find the speed of inflation adjustment towards to its long-run equilibrium for each country is asymmetric. Our results have important policy implications for monetary authorities in these Eastern European countries.     

German Investment in Ireland and in the Central and East European Countries

The accession of Central and Eastern European countries (CEECs) to the EU is expected by many to lead to the diversion of foreign direct investment towards the CEECs and away from other EU countries. The following paper focuses on the investigation of the internationalisation strategies and location choices of German multinational corporations (MNCs) in manufacturing against the background of growing regional economic integration, and particularly the fifth EU enlargement. It draws on the findings of a case study and interview results covering three German MNCs and their location choices for investment in both Ireland and the new EU member countries from Eastern Europe. This research project has been co-funded by the RIA in Dublin and DAAD. A first version of this work was presented at the September 2005 Irish Academy of Management Annual Conference in Galway.     

The IMF and the countries of Eastern Europe

The countries of Eastern Europe need to raise considerable finance not only in order to improve their balances of payments but also to adjust the structure of their economies over the long term to changed internal and external conditions. The adjustment measures require capital, but the Eastern European countries have only limited scope to broaden their own capital base. What actual or potential significance does the international Monetary Fund have for overcoming the difficulties of the CMEA countries in question?     

Does the importance of value,brand and relationship equity for customer loyalty differ between Eastern and Western cultures?

The use of the customer equity framework as a focal marketing strategy to increase customer loyalty has emerged as an important topic. Despite a growing number of investigations, previous studies are limited by their strong U.S. and European orientations. Research into Western consumers cannot necessarily predict the behaviour of Eastern consumers though. Therefore, this study investigates whether the link between customer equity drivers (value equity, brand equity and relationship equity) and loyalty intentions is sensitive to the cultural environment. A sample of 1553 Chinese and 1085 Dutch consumers in the banking and supermarket industries reveals that all three customer equity drivers exert a greater impact in Western than in Eastern cultures. This study also shows that Eastern consumers in general have higher loyalty intentions than Western consumers.     

An empirical analysis on the determinants of CEE government bond spreads

This paper studies the spread between 10 year Euro denominated Central and Eastern European (CEE) government bonds and their German counterpart. With newly available time series, regressions are run for each country separately in order to deliver a first insight into the underlying determinants. While higher ECB reference rate and market volatility increase bond spreads and turn out to be the main driving factors, there is no common pattern of macroeconomic fundamentals, pointing to strong heterogeneity within the CEE region. Overall, market variables are more significant than fundamentals during 1999 to 2007.     

Relationship Strategies for Market Entry

Abstract

With the fall of Communism, many New Zealand exporters joined the initial euphoria of the business community and took steps to re-establish trade with Eastern Europe. Despite some initial problems, most exporters are now establishing themselves in these markets. This paper examines the strategy of two large New Zealand firms and argues that forming a relationship with Eastern European traders is context driven. It is further argued that relationship-marketing models more accurately capture the trading realities of market entry in Eastern Europe. Based on the case studies, a series of propositions are developed examining the role of uncertainty in market entry, the formation of alliances and     

Megamarketing

Abstract

Recent political, economic, and social changes occurring in Eastern Europe are providing opportunities for Western firms to expand to this region. This study presents evidence on the wealth effects associated with expansion by U.S. firms to Eastern European countries. The results of this study show that differential wealth effects are associated with announcements of different modes of expansion, and with country of expansion. The results suggest that Hungary and Poland are important for expansion to Eastern Europe, and that joint ventures should be the preferred mode of expansion for U.S. firms seeking to expand to Eastern Europe. The results also suggest that investors are able to discern between different levels of country risk.