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Probing theoretically into Central and Eastern Europe: transactions, resources, and institutions

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Abstract

Since the 1990s, Central and Eastern Europe (CEE) has provided unique societal quasi-experiments, which represent opportunities to test the applicability of existing theories in international business and management studies and to develop new ones. Specifically, three lines of theorising have been advanced: (1) organisational economics theories; (2) resource-based theories; and (3) institutional theories. For each of these theories, we discuss how they contribute to the understanding of key issues, such as entry strategies of foreign investors, restructuring strategies of local incumbents, and entry and growth strategies of entrepreneurs. On this basis, we assess how CEE research has influenced the overall trajectories of theory development. CEE research has in particular highlighted the importance of contextual influences such as institutions. Thus, scholars have aimed at incorporating institutions into theories (such as organisational economics theories and resource based theories) and advancing an institution-based view of business strategy as a complementary perspective. We outline how future research in CEE and other emerging economies may advance this research agenda further.

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Notes

  1. For the purposes of this article, Central and Eastern Europe (CEE) includes the former Soviet Union as well as Central Europe.

  2. These three lines of theorising arguably correspond to the three pillars of the dominant paradigm in IB research, the OLI paradigm developed by Dunning (1993). RBTs explore ownership advantages (O); ITs analyse an important aspect of locational advantages (L); and TCT underpins internalisation incentives (I). However, it is important to note that the OLI paradigm has been developed to explain the rationale for international production (and hence the existence of multinational enterprises), whereas the three sets of leading theories we identify deal with a wider range of topics beyond the traditional coverage of the OLI paradigm.

  3. In IB research, TCT has been applied as internalisation theory as one of the three ‘pillars’ of the ‘eclectic paradigm’ to explain why MNEs choose different governance arrangements when operating abroad (Dunning, 1993). CEE research has pushed the frontier of this paradigm further by demonstrating that it cannot only be used to predict entry modes, but can also be linked with performance (Brouthers et al., 1999; Nakos and Brouthers, 2002). In other words, this research documents that firms that use variables specified in the eclectic paradigm when selecting entry modes are more satisfied with their CEE performance than those that do not, thus suggesting that Dunning's eclectic paradigm is ‘normative as well as descriptive’ (Brouthers et al., 1999: 841).

  4. Within the broad institutional literature, there are substantial debates, such as those between institutional economists and sociologists. However, in the relatively disciplinary ‘neutral’ fields of IB and management research, scholars have generally avoided participating in these discipline-based debates, and have taken the liberty to take the best available insights that can best inform the research questions at hand (see Peng and Heath, 1996; Peng, 2003). This integrative approach is also recommended by Scott (1995). In this article, we choose to follow this approach and do not engage in the debates within various institutional subfields. Specifically, we refer here to ‘institutions’ in the external environment of the firm as analysed in economics (North, 1990) and sociology (Scott, 1995). This concept of ‘institutions’ incorporates the frequently used concept of culture, which is ‘a substratum of institutional arrangements’ (Hofstede et al., 2002: 800). Therefore, we interpret studies dealing with cultural differences to be within the broader institutional literature focusing on the informal aspects of institutional constraints.

  5. For instance, Markóczy (2000) finds that common beliefs among individuals in Hungarian firms are more strongly associated with membership in the same functional area than with nationality.

  6. A particularly fruitful opportunity for research on cultural change arises with the expansion of the EU, which now incorporates most Central European and Baltic countries. Given that individuals and firms in EU member countries are presumably more homogeneous than those in nonmember countries, it will be interesting to hypothesise the convergence of individual beliefs and business strategies between Central and Western European EU member countries and the divergence between them and the former Soviet Union countries (except the Baltics, which have joined the EU).

  7. Although we acknowledge that the lack of coverage of nonmanagement research on CEE is a limitation, it is important to note that management is the largest contributing discipline to IB research in general and to JIBS in particular (Peng, 2001b: 822). In addition, relative to management, other business disciplines such as accounting, finance, marketing and MIS have less coverage on IB (Werner and Brouthers, 2002: Tables 1 and 2) and much less on CEE.

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Acknowledgements

Meyer thanks support from the Centre for East European Studies at Copenhagen Business School and the Danish Social Science Foundation (Project No. 24-01-0152). Peng acknowledges funding from the Ohio State University's Centre for Slavic and East European Studies and Center for International Business Education and Research as well as the National Science Foundation (CAREER Grant SES 0238820, formerly known as a Young Investigator Award). Earlier versions were presented at the Academy of International Business meeting in Puerto Rico (2002), Henley Management College (2004), and the University of Nottingham (2004). We thank conference and seminar participants, JIBS reviewers, Arnold Schuh, Brian Silverman (editor), Klaus Uhlenbruck, and Mike Wright for helpful comments and discussions, and Jana Penzes, Yen Thi Thu Tran, Yuanyuan Zhou, and David Zhu for excellent research assistance. All views expressed are ours and not necessarily those of the funding organisations.

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Authors and Affiliations

  1. University of Reading, Reading, Berkshire, UK

    Klaus E Meyer

  2. University of Texas at Dallas, Richardson, Texas, USA

    Mike W Peng

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  1. Klaus E Meyer
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Correspondence to Klaus E Meyer.

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Accepted by Brian Silverman, Departmental Editor, 22 February 2005. This paper has been with the authors for two revisions

Appendix A: Mapping the contributions

Appendix A: Mapping the contributions

In preparation for this article, we have systematically collected all CEE-related articles in 13 leading IB and management journals published during 1986–2004 (inclusive). They include 137 articles published by eight North America-based journals: the Academy of Management Journal (9 articles), Academy of Management Review (4), Administrative Science Quarterly (2), Journal of Business Research (8), Journal of International Business Studies (26), Journal of International Management (5), Journal of World Business (72), Organization Science (4), and Strategic Management Journal (7). A total of 81 articles are published by four Western Europe-based journals: International Business Review (21), Journal of Management Studies (11), Management International Review (19), and Organization Studies (30). A full list of these 218 articles can be found in the literature review section of the JIBS website (http://copenhagen.jibs.net/LitReviewsInfo.asp).

Table A1 reports some summary data on this diverse research. In columns 1 and 2 we report the leading individual and institutional contributors ranked in terms of the weighted numbers of publications in these top journals. Russia expert Sheila Puffer and her institution, Northeastern University, emerge as the most prolific contributors. Columns 3 and 4 list the most frequently cited papers in the SSCI database as of 31 December 2004. The most cited works include papers that cover both CEE and Asia, be it theoretical papers such as Peng and Heath (1996), empirical studies such as Child and Markóczy (1993), Ralston et al. (1997), and Hitt et al. (2000), or the introduction to a special issue by Hoskisson et al. (2000). The most cited papers analysing business in a specific CEE country are Frese et al. (1996) on worker motivation in East and West Germany [column 3] and Newman (2000) on enterprises in the Czech Republic [column 4].

Table a1 Contributor analysis
Full size table

Tabulating citations in this form is not without methodological problems. First, because we only systematically cover IB and management journals, we do not pay systematic attention to influential research in economics (e.g., Estrin, 2002; McMillan and Woodruff, 2002) and sociology (e.g., Stark, 1996; Ledeneva, 1998). Second, some influential research has been published as books, such as Peng (2000: 46 citations), Johnson and Loveman (1996: 23), Meyer (1998: 23), Estrin et al. (1997: 19), and Antal-Mokos (1998: 18). However, because books are not clearly identified in SSCI, we are unable to provide exact citation counts for all relevant books. Finally, the SSCI database as well as our own database has a better coverage of US-based journals than of European or Asian journals. Notably, there is no CEE-based management journal included in the SSCI database. This probably leads to relatively stronger ratings for scholars cited in North American journals, compared with those who may be influential within the CEE region.

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Meyer, K., Peng, M. Probing theoretically into Central and Eastern Europe: transactions, resources, and institutions. J Int Bus Stud 36, 600–621 (2005). https://doi.org/10.1057/palgrave.jibs.8400167

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