Supraterritoriality, Embeddedness, or Both? Foreign Direct Investment in Central and Eastern Europe

Abstract

Does the rise of foreign direct investment (FDI) in Central and Eastern Europe lead to supraterritoriality? The analysis of FDI flows between world investor countries and Central and East European (CEE) hosts between 1989 and 2000 shows that the majority of FDI flows into CEE in this period do not exemplify a trend of undifferentiated transcendence of post-communist borders. Rather, FDI flows continue to be based in territoriality and embedded in existing social relations between investor and host countries: migration and trade flows, historical ties, political alliances, and cultural affinities. Nevertheless, the rhetoric supporting the opening of post-communist countries to FDI is widespread and consistent with the neoliberal credo, which has acquired a supraterritorial character. Ultimately, we see that embeddedness and supraterritoriality co-exist but they manifest themselves for distinct FDI phenomena: the concrete economic practice and the economic rhetoric, respectively.

Citation

Bandelj, N. (2007), "Supraterritoriality, Embeddedness, or Both? Foreign Direct Investment in Central and Eastern Europe", Fábián, K. (Ed.) Globalization: Perspectives from Central and Eastern Europe (Contemporary Studies in Economic and Financial Analysis, Vol. 89), Emerald Group Publishing Limited, Leeds, pp. 25-63. https://doi.org/10.1016/S1569-3759(07)89001-2