Cultural and Political Embeddedness, Foreign Investment and Locality in Transforming Economies: The Case of ABB in Poland and China

Competition and Change, Vol. 9, No. 3, pp. 277-297, 2005

21 Pages Posted: 4 Dec 2008

See all articles by Jane Hardy

Jane Hardy

University of Hertfordshire - Business School

Frank Currie

University of Hertfordshire - Business School

Zhen (Peter) Ye

University College London - Bartlett School of Sustainable Construction; The University of Chicago Booth School of Business; Infrastructure Systems Institute, UCL's Dept of CEGE

Date Written: September 1, 2005

Abstract

The article draws on the concepts of cultural and political embeddedness to analyse the local embeddedness of a global transnational engineering firm in transforming economies. It compares the process of the negotiations for and the acquisitions of assets undertaken by ABB in Wroclaw, Poland and Xiamen, China. With reference to political embeddedness, while the firm has a strong espoused business culture, the relative strength and autonomy of local institutions in Wroclaw and Xiamen implied different corporate strategies for entry and acquisition. The cultural embeddedness of ABB meant that there were strong similarities in Xiamen and Wroclaw in terms of transferring the norms and routines of the firm. Taking a longer-term view what may appear to be contrasting approaches could be viewed as the same strategy working under more severe institutional constraints, which ultimately slows the pace of acquisition and control rather than fundamentally changing its nature.

Keywords: Embeddedness, Foreign investment, Transformation, Transnational firms

JEL Classification: F23, F21, L23, L52, L60, M14, M50, N60, O17, O52, O53, P16, P20, P26, P33, P45, P50, P51, P52, P59,

Suggested Citation

Hardy, Jane and Currie, Frank and Ye, Zhen, Cultural and Political Embeddedness, Foreign Investment and Locality in Transforming Economies: The Case of ABB in Poland and China (September 1, 2005). Competition and Change, Vol. 9, No. 3, pp. 277-297, 2005, Available at SSRN: https://ssrn.com/abstract=1310862

Jane Hardy

University of Hertfordshire - Business School ( email )

College Lane
Hatfield, Hertfordshire Al10 9AB
United Kingdom

Frank Currie

University of Hertfordshire - Business School ( email )

College Lane
Hatfield, Hertfordshire Al10 9AB
United Kingdom

Zhen Ye (Contact Author)

University College London - Bartlett School of Sustainable Construction ( email )

The University of Chicago Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

HOME PAGE: http://https://www.chicagobooth.edu/

Infrastructure Systems Institute, UCL's Dept of CEGE ( email )

120 Chadwick Building UCL
London, WC1E 6BT
United Kingdom

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