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Political Interests and the Emergence of Commercial Banking in Transition Economies

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  • Laszlo Tihanyi
  • W. Harvey Hegarty

Abstract

abstract This paper examines how interactions between government agencies and banking organizations led to the emergence of commercial banking in the Czech Republic and Hungary during the 1990s. We rely on interviews with bank managers at six large banks, government officers, and experts at other organizations to learn how actions based on different political ideologies shaped the banking field. We integrate prior research on institutional change, political interest, and transition economies to describe the emergence of commercial banking. Three important problems characterized commercial banking in the two countries: the disposal of bad loans, the privatization of banks, and the establishment of banking services. We argue that the solutions to these problems based on the changing political interests of organizational actors and regulators represent the phases of institutional development in commercial banking during the 1990s. Implications of our research are discussed regarding the political perspective of organizational fields in transition economies.

Suggested Citation

  • Laszlo Tihanyi & W. Harvey Hegarty, 2007. "Political Interests and the Emergence of Commercial Banking in Transition Economies," Journal of Management Studies, Wiley Blackwell, vol. 44(5), pages 788-813, July.
    • Handle: RePEc:bla:jomstd:v:44:y:2007:i:5:p:788-813
    DOI: 10.1111/j.1467-6486.2007.00707.x
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    References listed on IDEAS

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    1. Stijn Claessens, 1998. "Banking reform in transition countries," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 2(2), pages 115-133.
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    Cited by:

    1. Ilya Okhmatovskiy, 2010. "Performance Implications of Ties to the Government and SOEs: A Political Embeddedness Perspective," Journal of Management Studies, Wiley Blackwell, vol. 47(6), pages 1020-1047, September.
    2. Pistor, Katharina, 2010. "Into the Void: Governing Finance in Central and Eastern Europe," WIDER Working Paper Series 065, World Institute for Development Economic Research (UNU-WIDER).
    3. repec:bla:jomstd:v:47:y:2010:i:s2:p:1561-1589 is not listed on IDEAS
    4. R. Duane Ireland & Laszlo Tihanyi & Justin W. Webb, 2008. "A Tale of Two Politico-Economic Systems: Implications for Entrepreneurship in Central and Eastern Europe," Entrepreneurship Theory and Practice, , vol. 32(1), pages 107-130, January.
    5. Katharina Pistor, 2010. "Into the Void: Governing Finance in Central and Eastern Europe," WIDER Working Paper Series wp-2010-065, World Institute for Development Economic Research (UNU-WIDER).
    6. Jiandong Chen & Douglas Cumming & Wenxuan Hou & Edward Lee, 2016. "CEO Accountability for Corporate Fraud: Evidence from the Split Share Structure Reform in China," Journal of Business Ethics, Springer, vol. 138(4), pages 787-806, November.
    7. Ciprian Stan & Mike Peng & Garry Bruton, 2014. "Slack and the performance of state-owned enterprises," Asia Pacific Journal of Management, Springer, vol. 31(2), pages 473-495, June.
    8. Hoorani, Bareerah Hafeez & Plakoyiannaki, Emmanuella & Gibbert, Michael, 2023. "Understanding time in qualitative international business research: Towards four styles of temporal theorizing," Journal of World Business, Elsevier, vol. 58(1).
    9. Jessie Zhou & Mike Peng, 2012. "Does bribery help or hurt firm growth around the world?," Asia Pacific Journal of Management, Springer, vol. 29(4), pages 907-921, December.
    10. Saul Estrin & Delia Baghdasaryan & Klaus E. Meyer, 2009. "The Impact of Institutional and Human Resource Distance on International Entry Strategies," Journal of Management Studies, Wiley Blackwell, vol. 46(7), pages 1171-1196, November.
    11. Rachida Aïssaoui & Frances Fabian, 2022. "Globalization, economic development, and corruption: A cross-lagged contingency perspective," Journal of International Business Policy, Palgrave Macmillan, vol. 5(1), pages 1-28, March.
    12. Ning, Lutao & Kuo, Jing-Ming & Strange, Roger & Wang, Boya, 2014. "International investors’ reactions to cross-border acquisitions by emerging market multinationals," International Business Review, Elsevier, vol. 23(4), pages 811-823.

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