Central and Eastern Europe Investments: A Comparison of US, Dutch and German Firm Activities

Abstract

As the previous chapters in this book have pointed out, rapid changes have occurred in Central and Eastern Europe (CEE) since 1989. These changes have affected the lives of millions of people living in CEE, as well as having an impact on people outside the region. For businesses, the changes that have occurred have meant hardship, disappointment, opportunity, and growth. One of the most dramatic changes to affect businesses both within and outside the region has been the change from centrally planned economies to free-market economies. This has meant that CEE-based firms are now free to compete among themselves. Free-market economics also has meant that foreign firms are welcome to compete within the formerly closed markets of CEE. Western firms have responded to these changes in a number of ways. For the majority of Western firms the economic, political, and social uncertainties in CEE have made them hesitant to begin doing business in the region. For other firms, the economic and social reforms have signalled a new, unexplored, potentially large market for their goods and services. This second group of firms have begun entering the CEE markets using various forms of operation, depending on their attitude toward future prospects in the region.

The authors would like to thank Q. van Dam and Bart Bakkum for their research assistance. The authors and publishers are gratified to The Regents of the University of California for permission to use information from A. Shama, ‘Entry strategies of US firms to the former Soviet Bloc in the newly independent states, Baltic states and East European Countries’, California Management Review, vol. 37, no. 3. Copyright © 1995 The Regents of the University of California.