| Investigating market transition in a comparative perspective, the dissertation examines sources of variation in foreign direct investment (FDI) in post-socialist countries of Central and Eastern Europe. While previous research on FDI emphasizes the importance of efficiency accounts based on individual rationality, my approach conceptualizes FDI as a relational social process. I argue that FDI flows and transactions are socially constituted and shaped by institutions, power struggles, social networks and cultural understandings.; To situate the study in its regional context, Chapter 2 provides overviews of post-socialist transformations and FDI in eleven Central and East European countries included in the study. Chapter 3 traces over time variation in FDI across these countries and finds that longitudinal country trends are little affected by economic forces privileged in traditional studies. Rather FDI is shaped by the actions of host states, which create markets by directly engaging as sellers of state property. State actions are shaped by external isomorphic pressures and path-dependency of domestic institutions. Chapter 4 examines cross-sectional variability in FDI flows between investor-host country dyads. I find that, net of economic potential and political risk of host countries, trade and migration flows between investors and hosts, political alliances between countries as well as shared cultural ties significantly structure FDI, substantiating the embeddedness of macro-economic processes. Chapter 5 shifts the analysis to the organizational level and asks what influences the realization of FDI attempts. Using cases of FDI transactions, I argue for an understanding of economic action as practical action. FDI efforts are not simply a matter of rational efficiency maximization but are structured by business connections, personal ties, conceptions about transaction partners, political alliances and struggles for power. The embeddedness and uncertainty contribute to substantive and procedural variability in economic action, beyond profit-maximizing means-ends calculations.; This research advances economic sociology by investigating substantive varieties of embeddedness at micro and macro levels. Examining the creation and operation of markets in Central and Eastern Europe, the dissertation also contributes to analyses of transition from socialism and comparative study of capitalism. |
