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Nature and determinants of productivity growth of foreign subsidiaries in Central and East European countries

Author

Listed:
  • Slavo Radosevic

    (UCL School of Slavonic and East European Studies)

  • Boris Majcen

    (Institute for Economic Research, Ljubljana)

  • Matija Rojec

    (University of Ljubljana and Institute of Macroeconomic Analysis and Development)

Abstract

The paper examines the determinants of productivity growth in foreign manufacturing subsidiaries in five Central and East European (CEE) countries by analysing patterns of control, nature of firms' capabilities and firms' market orientation. Building on the so called 'developmental subsidiaries' perspective we show that productivity growth is determined jointly by corporate governance, production capability and market orientation variables. CEE subsidiaries have relatively strong autonomy over control of their business functions, but within a dominantly production oriented mandate. Majority foreign equity share has a significant and positive impact on subsidiaries' productivity growth. These results present very strong regional characteristic.

Suggested Citation

  • Slavo Radosevic & Boris Majcen & Matija Rojec, 2006. "Nature and determinants of productivity growth of foreign subsidiaries in Central and East European countries," UCL SSEES Economics and Business working paper series 68, UCL School of Slavonic and East European Studies (SSEES).
    • Handle: RePEc:see:wpaper:68
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    References listed on IDEAS

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    Cited by:

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    2. Kravtsova, Victoria & Radosevic, Slavo, 2012. "Are systems of innovation in Eastern Europe efficient?," Economic Systems, Elsevier, vol. 36(1), pages 109-126.
    3. Burger, Anže & Jindra, Björn & Marek, Philipp & Rojec, Matija, 2018. "Functional Upgrading and Value Capture of Multinational Subsidiaries," Journal of International Management, Elsevier, vol. 24(2), pages 108-122.
    4. Pisoni, Alessia & Fratocchi, Luciano & Onetti, Alberto, 2013. "Subsidiary autonomy in transition economies: Italian SMEs in Central and Eastern European countries," Journal of East European Management Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 18(3), pages 336-370.
    5. Rajneesh Narula & José Guimón, 2012. "The Role of Multinational Corporations in the National Innovation Systems of the EU New Member States," Chapters, in: Martin Heidenreich (ed.), Innovation and Institutional Embeddedness of Multinational Companies, chapter 13, Edward Elgar Publishing.
    6. RNuket Kirci Cevik & Sel Dibooglu & Ali M. Kutan, 2016. "Real and Financial Sector Studies in Central and Eastern Europe: A Review," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 66(1), pages 2-31, February.
    7. Slavo Radosevic & Katerina Ciampi Stancova, 2018. "Internationalising Smart Specialisation: Assessment and Issues in the Case of EU New Member States," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 9(1), pages 263-293, March.
    8. Slavo Radosevic & Esin Yoruk, 2016. "A New Metrics Of Technology Upgrading: The Central And East European Countries In A Comparative Perspective," UCL SSEES Economics and Business working paper series 2016-2, UCL School of Slavonic and East European Studies (SSEES).

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