The Analytical Framework

Abstract

The theoretical approach that this study applies to explain the embeddedness of food MNEs in CEE is based on the systems of innovation (SI) approach and on the international business (IB) literature. SI gives a macro-level view, as it stresses the role of institutions and economic actors for the embeddness of FDI, while IB literature explains that phenomenon from a micro-level perspective, using firm strategies and investment motives. As the host country capabilities and government regulations have an impact on firms’ strategies, I use a synthesis of both SI and IB literatures in order to explain the level of embeddedness of MNEs in CEE.