The institutional embeddedness of transnational corporations: dependent capitalism in Central and Eastern Europe

This chapter explores the consequences of dependence on transnational capital for the institutional structures of four East Central European countries: the Czech Republic, Hungary, Slovakia and Poland. These countries have been very successful in attracting foreign capital, and have geared their institutional systems to attract and embed foreign corporations. The chapter argues that a combination of state efforts, activities of foreign corporations themselves and the European Union has led to the emergence of a transnationalized institutional sphere that supports the operations of outside firms. These transnational institutional solutions have emerged and exist independently of institutions geared towards the domestic sector, creating a segmented institutional environment. This segmentation has allowed only some fractions of domestic capital to survive in the shadow of the dominant model of dependent capitalism. However, with the recent ideological shift in the region, the domestic institutional segments may also become springboards for the politicians or domestic businessmen to attempt the construction of more ‘national’ forms of capitalism.