Acquisitions, Institutions and Policy

Abstract

Foreign investors and local institutions have a great influence on each other. Foreign investors adapt to requirements imposed on them by local institutions, and adapt to local market conditions that are shaped by local institutions. However, foreign investors directly and indirectly influence local institutions through their interactions with local businesses, individuals and policy makers. This is a two way process; local policy makers in turn aim to influence institutions, notably the legal framework, in ways that influence the patterns of foreign investment and its interactions with local stakeholders. The result is a complex interaction between economic agents, including foreign investors, political agents and the institutional environment governing them all, which we try to represent in Figure 8.1. This chapter traces these interdependencies in European emerging markets (EEE), as they emerge from both the survey and the case evidence. All of these elements are fundamentally influenced by the fact that the three countries, and therefore their institutions and business environment, are in the process of transition from communist planning to free markets planning, as well as having recently joined the European Union (EU).KeywordsEuropean UnionForeign InvestorInstitutional EnvironmentForeign FirmBusiness EnvironmentThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.