Cross-Border Investing: The Case of Central and Eastern Europe

309 Pages·2004·8.984 MB·English

by  Julia Djarova

CROSS-BORDER INVESTING
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Cross-Border Investing
The Case of Central and Eastern
Europe
Dr Julia Djarova
ECORYS-NEI and Erasmus University
Rotterdam, The Netherlands
KLUWER ACADEMIC PUBLISHERS
NEW YORK,BOSTON, DORDRECHT, LONDON, MOSCOW
eBookISBN: 1-4020-7985-0
Print ISBN: 0-7923-7474-6
©2004 Kluwer Academic Publishers
NewYork, Boston, Dordrecht, London, Moscow
Print ©2004 Kluwer Academic Publishers
Boston
All rights reserved
No part of this eBook maybe reproducedor transmitted inanyform or byanymeans,electronic,
mechanical, recording, or otherwise, without written consent from the Publisher
Created in the United States of America
Visit Kluwer Online at: http://kluweronline.com
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In memory of Jan Willem
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Contents
Tables xi
Figures xiii
Preface xvii
Acknowledgements xix
Foreword xxi
Introduction and Summary 1
1. Cross-border decision-making 1
2. Organisation of the book 3
PART I 15
FOREIGN DIRECT INVESTMENT AND EMERGING MARKETS
Chapter 1: The world map of investments 17
1. Introduction 17
2. General development of world FDI 17
3. The Asian crisis and correlation between the regions 27
4. Country risk 30
5. The nature of FDI 32
6. Conclusions 40
Chapter 2: Dynamics of FDI in Central and Eastern Europe 43
1. Introduction 43
2. Trade and pilot investments 43
3. Ten years of expansion 47
4. Conclusions 67
viii Contents
PART II 71
CROSS-BORDER DECISION-MAKING
Chapter 3: Analytical approaches towards FDI 73
1. Introduction 73
2. Five schools on FDI 73
3. Objectives and determinants of FDI 82
4. Conclusions 85
Chapter 4: Central and Eastern Europe as an investment area 89
1. Introduction 89
2. Approach to the analysis of CEE as an investment area 89
3. CEE and other emerging markets 90
4. The transition process of Central and Eastern Europe 94
5. Specific features of CEE as an investment area 108
6. Investment determinants of CEE as an investment area 112
7. Conclusions 116
Chapter 5: Cross-Border Investment Model 121
1. Introduction 121
2. Cross-Border Investment Model 121
3. Company’s global strategies 126
4. Specific foreign investment strategies 132
5. Company’s investment objectives towards CEE 134
6. Matchinginvestment objectives with investment determinants 140
7. Investment modes 142
8. Matching investment modes with investment forms 146
9. Typology of investment decisions 149
10. Conclusions 152
PART III 155
STRATEGIES OF MULTINATIONALS TOWARDS CENTRAL
AND EASTERN EUROPE: CASE STUDIES
Chapter 6: Automobile industry 157
1. Introduction 157
2. Internationalisation and competition in the car industry 158
3. The market of Central and Eastern Europe 162
4. Volkswagen’s check list of success 173
5. Conclusions 176
ix
Chapter 7: International banking: ING Bank 181
1. Introduction 181
2. Eastward expansion of the banking sector 182
3. ING Group 185
4. Strategy and organisational structure 186
5. Strategy towards CEE 190
6. Conclusions 195
Chapter 8: Unilever Group 201
1. Introduction 201
2. Unilever’s product mix and markets 203
3. The organisational and decision-making structure 207
4. The decision-making process in CEE 209
5. Global corporate strategy and strategies towards CEE countries 211
6. Attractiveness of CEE as an investment area 213
7. Investment experience in CEE 214
8. Major acquisitions of Unilever in CEE 222
Chapter 9: Numico 225
1. Introduction 225
2. Numico’s internationalisation strategy 230
3. Numico in Central and Eastern Europe 234
4. Investing first means investing in competitiveness 237
5. Investing in core business and quality 238
6. Investing in suppliers 239
7. Investing in people 239
8. Investing in patience and hope 241
Chapter 10: Sara Lee / Douwe Egberts 245
1. Introduction 245
2. Product and geographic mix 246
3. Corporate strategy 248
4. Sara Lee/DE’s approach to global expansion 249
5. Decision-making towards Central and Eastern Europe 251
6. Forms of investment 253
7. Investment experience 254
8. Constraints and lessons learned 256
9. Conclusions 257
Annex: FDI definitions and statistics 259
1. Definitions of foreign investment 259
2. Interpreting FDI statistical data 261