Commodity chains, foreign investment and labour issues in Eastern Europe

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In terms of ownership and operations, many companies in Eastern Europe have now been integrated into the world economy. In this article, informed in part by a critical engagement with the Global Commodity Chains (GCC) perspective, we explore the nature and significance of international linkages among firms in Eastern Europe. In particular, we argue that it has been the legacies of the state socialist past embedded in the inherited macro- and microeconomic structures, on the one hand, and the strategies of multinational firms on the other, rather than the international linkages in any simple sense, that have been the main influencing factors. While we do not deny the existence of inter-firm relations similar to the ones described in the GCC literature, we point out that these relationships are much more complex than assumed in that approach and that this complexity is a product of the very different historical backgrounds and modes of incorporation into the world economy of the various Eastern European societies. Drawing on empirical evidence from Hungary and focusing specifically on employment and other labour issues, we argue that there are a variety of firm development paths in Eastern Europe and that these have differing implications for the integration of firms, regions and countries of Eastern Europe into the world economy.