Measuring the Role of Central and Eastern European Countries in World Drug Research

This paper explores the sociological behavior of firms in the pharmaceutical industry in Central and Eastern Europe as measured by funding linkages. Using the ISI Web of Science data-base, the number of research papers funded by top American and European pharmaceuticals with at least one author from Central and Eastern Europe are identified. Results indicate that Poland leads in the region by both the number of papers funded and by percentage of a firm’s total papers funded, followed closely by Hungary, Greece and the Czech Republic. Though the percentages of any firm’s linkages with a Central and Eastern European author are small (upper limit being 6.6%), this percentage is skewed due to the fact that the US is cited for 50% of papers for most firms. Roche Corporation is the top funder of papers among both US and European firms. Incidentally, zero top American pharmaceuticals were found to have an R&D center located in Central and Eastern Europe whereas European firms: GlaxoSmithKline and Sanofi-Aventis do—possibly indicating a difference in business strategy between European and American pharmaceuticals.     

Rethinking the dynamic of global production networks: Integrate the influence of suppliers and towards a flexible strategy making causal mechanism

The global production network (GPN) 2.0 framework mainly considers the organizational capabilities of lead firms, neglecting the influence of supplier capabilities on the strategic making of lead firms. I argue that the GPN 2.0 framework must integrate the influence of supplier capabilities (both industrial and individual firm levels) to better explain the organization of the global economy. Industrial-level capability determines the possible strategic choices that firms may make under certain dynamic combinations, whereas the individual firm level determines the geographic extension direction of GPNs. Therefore, this study incorporates the influence of suppliers and builds a more flexible strategy-making causal mechanism other than the definitive and limiting causal mechanism in GPN 2.0. I hope this article can promote the further development of GPN 2.0 and convey some valuable concepts to make it perform better in deconstructing the organization of the global economy in the real world.     

Global value chains in international knowledge work: networks,stratifications and labour markets

In this article, I aim to cast light on the arguably indeterminate phenomenon of the global labour market (GLM) by placing the focus on an industry that has sometimes been perceived as epitomizing homogeneity and ‘world flatness’ in its deployment of geographically dispersed knowledge workers, that of international software development. Engaging in a sanguine analysis of this industry with reference to an empirical study of outsourcing to Ukraine it is revealed that labour markets servicing ICT (Information and communication technology) are subject to deep, if fluctuating, social stratifications. With reference to the notion of the global value chain (GVC), 1 1 ¹GVC analysis focuses on the governance patterns and relational dynamics between lead and supplier firms at the sectoral level. The GVC and its predecessor, the global commodity chain (GCC) focus on the inter‐firm linkages and especially power relations between different actors (Feuerstein 2013). The similar concept of global production network (GPN) concerns the broader set of relations of power, positionality and value capture between all relevant firm and extra firm actors within a network (Thompson 2013). For this study on sourcing in the global software industry, the term GVC will be utilized throughout.
the significance of factors such as knowledge, language, citizenship and age as labour market differentiators for knowledge work is brought to the fore.     

Global cities in Global Commodity Chains: exploring the role of Mexico City in the geography of global economic governance

In this article I assert that global cities are critical nodes in Global Commodity Chains because it is from them that producer services are provided. I explore forward linkages of producer service firms in Mexico City, showing that there are important service flows to companies responsible for the globalization of the 'Mexican' economy. Based on this finding I also indicate reasons why Mexico City is 'on the map' of global cities and of Global Commodity Chains. I argue that both access to local knowledge and close contact to clients are key factors. A third issue dealt with is the position of Mexico City in the geography of governance of commodity chains. The analysis suggests that it is useful to break up global city functions into the management of the world economy and into its command and control, because Mexico City is certainly a place for the former, while the scope of influence exercised from the city is rather limited.     

Philanthropy without borders: US private foundation activity in Eastern Europe

Worldwide disillusionment with governmental problem-solving, decline in governmental resources, increasing prominence of multinational corporations, and the collapse of communism act as powerful stimuli to international philanthropic activity. US private foundations in particular have been highly motivated by the collapse of communism to act as venture capitalists in seeking grant-making opportunities and philanthropic partners in Eastern Europe. International philanthropy of private foundations can provide expertise in and resources for global as well as regional or local problem-solving. However, resources available must be viewed realistically. This paper puts available foundation resources in perspective. Further, international philanthropy by private foundations is no panacea for the world's problems, and may only be effective at the margins. But to the extent it can be an effective problem solver, it should not be artificially limited by boundaries and laws of any one nation, as it is at present. While reviewing some trends towards increasing activity of larger US private foundations in Eastern Europe, this paper also illustrates small segments of the existing legal, tax and other barriers to international philanthropy. In many instances, simple awareness of some of these barriers will enable potential grantees and philanthropic partners to surmount these barriers. But within the larger context of globalisation of philanthropy, all such barriers to the free movement of philanthropic capital and expertise should be identified and ultimately removed so that international philanthropy, like international trade and free movement of capital and goods, can emerge to an optimal level.Susan Flaherty is a partner in the law firm of Roha & Flaherty, 1900 L. Street N.W., Washington, DC, 20036-5002.     

MEASURING THE INTERDEPENDENCE OF MULTINATIONAL FIRMS' FOREIGN INVESTMENTS

Earlier work found evidence for geographic linkages of aggregate foreign direct investment across countries and country‐pairs. From a theoretical point of view, such linkages at the macroeconomic level may root in between‐firm as well as within‐firm linkages and originate from information spillovers across or within firms in exploring unknown markets, and vertical linkages between production plants across different locations within the firm. We use data on the universe of German multinational enterprises (MNEs) to empirically explore how marginal investments at one foreign affiliate depend on investments at other affiliates within the same MNE. The empirical approach employs two channels or modes of cross‐affiliate interdependence: mere geography (capturing horizontal linkages through correlated learning and horizontal competition within the firm) and input–output relationships within or across industries (which capture vertical linkages). Adding to earlier findings at the aggregate level, we find evidence of a significant interdependence of investments within the firm. In the firm‐level data at hand, vertical linkages appear to be more important than horizontal ones. Investments at one location tend to stimulate investments at other locations of the same MNE, particularly if input linkages are strong. The opposite seems to be true for output linkages. Beyond vertical linkages, mere geographic proximity matters only to a minor extent. This suggests that evidence of linkages through geographic closeness at aggregate data levels accrue mainly to reasons of vertical linkages within networks of affiliates. (JEL C31, D22, F21, F23, F68, G31, H32)     

THE EFFECT OF BUSINESS CYCLES ON GROWTH: KEYNES VS. SCHUMPETER

In contrast to recent 'neo-Schumpeterian' models, which argue that business cycles are good for growth, we develop a 'neo-Keynesian' model, where monopolistically competitive firms set prices and produce output in advance of the realization of (stochastic) monetary velocity. In such a setting, there is an asymmetry in the effect of business cycles on income: recessions are bad, because the representative firm is demand-constrained and its unsold output is wasted, but booms are not good, because the firm is output-constrained and cannot produce any more output. A more severe business cycle thus reduces the expected income of a firm, and the expected return to investment, which reduces the growth rate of the economy. ( JEL E32, E52, O41, L13)     

Stitching-up the labour market

In mainstream International Political Economy (IPE) writings on globalization, the multinational corporation (MNC) is placed at the centre of the emergence of a global market economy. Allied to this view is the normative position that these firms will have a positive, developmental impact on the states that they invest in. This article presents a gendered political economy perspective on the process of foreign direct investment (FDI), arguing that liberal IPE has failed to understand adequately the impact of the MNC on host states because of its attachment to ideas of rational action and modernization, and its assumption that the market is a gender-neutral space. By contrast, in this article, I argue that by looking at the gendered nature of recruitment practices within an MNC we are forced to confront the way in which firms work with existing inequalities embedded in the economy of the host state in order to secure a supply of low cost labour. The article presents case study research from an MNC operating in Malaysia, focusing on how company recruitment intersects with local social divisions based upon gender, ethnicity as well as age, rural–urban divides, class and education. I suggest that via its recruitment strategies, the firm plays a role in the construction of gendered and racialized inequalities. I argue that the MNC needs to be investigated as a site for the active construction of gendered identities across globalizing production lines, thus moving away from the traditional focus of feminist analysis of East Asian development on the experiences of the workers themselves.     

Reinserting the professional into the study of globalizing professional service firms: the case of law

Abstract In discussions of the globalization of professional service firms there is an increasing recognition that understanding the ‘social construction’ of organizational architectures is essential. In this article we argue, using the management of transnational law firms as an example, that to understand effectively these social constructions we must reincorporate an understanding of the principles of professionalism into discussions. We highlight the importance of occupational autonomy to professionals and how this is likely to influence the strategies that global professional service firms use. We also point to what we term the ‘varieties of professionalism’ and the spatially variable professional projects that underlie the values and identities of lawyers. This reveals the way rational and efficient forms of organizing have to be adapted as a result of professional values and the diverse ideals and beliefs of lawyers in different international jurisdictions.     

When do value chains go global? A theory of the spatialization of global value chains

In this article, I synthesize and extend the theoretical literature on global commodity chain (GCC) and global value chain (GVC) governance to generate a theory of the ‘globalness’ of value chains and the spatialization of value chain linkages. Drawing from the original GCC dichotomy of buyer/producer‐driven commodity chains, I emphasize the height of entry barriers to manufacturing and supplier capability differentials across the North–South divide as determinants of the amount and geographic extent of global offshoring behaviour. Using a novel empirical approach to the measurement of global offshoring behaviour at the global industry level, the article shows that the original GCC governance scheme successfully predicts the levels, rates and timing of global production fragmentation across three networked industries. Combining the original GCC governance scheme with the more recent GVC governance types, the theory leads to predictions about the specific types of GVC linkages that might occur given the drivenness of a chain and the geographical location of lead firms and their suppliers. I conclude by drawing out the theory's implications for our understanding of the link between value chain formation and economic development in the global South and suggesting areas for future research.     

Intra-firm and extra-firm linkages in the knowledge economy: the case of the emerging mega-city region of Munich

With the aim of identifying emerging patterns of spatial development and the driving forces behind the associated process, in this article we draw together two threads of interlinked phenomena. First, we look at how multi-location firms from the knowledge economy develop their intra-firm networks internationally. Second, we establish the partners with which these firms have working relationships along individual chains of value, and in which these extra-firm linkages are located. We start from a conceptual background that combines the location behaviour of firms with a value chain approach. We analyse the two main pillars of the knowledge economy – advanced producer services (APS) and high-tech firms. A case study carried out in the greater Munich area provides the empirical basis and draws on quantitative and qualitative research methods. The results provide evidence that the greater Munich area can be regarded simultaneously as a hierarchically organized polycentric mega-city region and high-grade localized system of value chains.     

The duality of world cities and firms: comparing networks,hierarchies, and inequalities in the global economy

Much of the research on globalization conceives of the global economy as structured by networks among places, while separately organizational research has examined the role of networks among firms in structuring competition, collaboration, and cooperation. In both cases, position and centrality within the network confers certain advantages and disadvantages, the distribution of which defines a hierarchy. In this article, I explore the idea of dual networks of world cities and firms, then use Breiger's approach to define two such networks: one among 313 world cities, another among 100 advanced producer service firms. Comparison of the degree of inequality in the hierarchies implied by these networks suggest that world city hierarchies are steeper than firm hierarchies (that is there is greater inequality among cities). Thus, even under conditions of footloose global capitalism, place still matters: where a producer is located has more impact than who provides support services.     

Exploring cultural economies of internationalization: the role of ‘iconic individuals’ and ‘brand leaders’ in the globalization of headhunting

Understanding the internationalization of professional services like advertising, architecture, accounting, consulting and legal services continues to attract considerable attention in academic and policy circles. Research in geography and management studies has emphasized the different organizational strategies adopted by firms as they seek to develop and maintain a competitive position within an increasingly global economy. In this article we develop a new strand in this literature by adopting a cultural economy approach to argue that an important, yet comparatively neglected, aspect of the internationalization strategies of transnational professional service firms is the role of certain ‘iconic individuals’ and ‘brand leaders’ in influencing the practice of internationalization. Drawing on empirical research into the burgeoning European executive search (headhunting) industry we identify a cadre of such individuals and brand leaders that act as resources other firms leverage when internationalizing. This highlights the importance of a cultural economy perspective in theories of the internationalization of professional services and its value in moving discussions beyond purely economic analyses of competitive advantage.     

Zwei Dimensionen der Internationalisierung: Eine empirische Analyse deutscher Grossunternehmen

In order to analyze the impact of internationalization on national institutions, methods of measuring the degree of internationalization are required. The article presents a method for measuring the degree of internationalization of firms. We assume that the internationalization of firms has several dimensions which cannot be combined into one index, and therefore, have to be distinguished. The first dimension refers to the production activities of firms abroad; the second is measured by the proximity of the firm to international capital. Using a group of the 100 largest German companies both dimensions are empirically tested. Factor analysis supports the assumption that both dimensions, the product-oriented and the financial dimension, do not co-vary and can be separated. Using the measurements we can rank firms into higher and lower degrees of internationalization.     

L’après-communisme et le déclin du syndicalisme à l’Est : leçons de Pologne et d’ailleurs

Trade unions in Eastern Europe have declined in almost all aspects since 1989, due not just to economic restructuring but to subjective factors such as reactions to communist-era legacies and skilled workers’ animosities towards the unskilled, which made union officials themselves skeptical of the value of unions. Starting around the turn of the new century, however, five factors now favor revival: survival imperatives of the union bureaucracy, incorporation into the European Union, emerging cross-border labor solidarity, a new generation of workers, and the end of postcommunism in the firm, or the dismissal of unessential workers, which means union officials no longer need to defend the unskilled. Three obstacles, however, continue to work against union revival: ideological (continued distrust of unions), organizational (plethora of small firms), and structural (location in the global economy). Organized labor is likely to remain weak, with a few stronger unions emerging in the manufacturing sector that are more elitist, male, and less class oriented than those in the past, while unions chiefly in the public sector would flounder. Such an arrangement is not conducive to stable liberal democracy.     

Powers and Limits of Transnational Corporations: The Case of ADM

Abstract This analysis employs the case of lysine price fixing involving the food‐processing transnational corporation (TNC) Archer Daniels Midland (ADM) and Asian‐based firms. In an “economy and society” conceptual framework grounded in the sociology of agriculture and food, we investigate the powers and limits of TNCs in the global era. We argue that TNCs maintain significant powers which allow them to avoid the laws and regulations of nation‐states. ADM was able to organize an illegal global cartel to control the world production and price of the feed supplement lysine. In addition, TNCs' actions in the global arena are limited by their inability to trust business partners and to organize and maintain systems of social control; these roles historically have been played by the nation‐state. We conclude that despite their significant powers, TNCs' contradictory position in the global arena provides opportunities that can be used to democratize society.     

Networks of organizational learning and adaptation in retail TNCs

Abstract In this article we contribute to a growing body of literature concerned with the socio‐cultural dynamics of learning and adaptation inside firms. Specifically, we apply a ‘competence‐based’ view of the firm to a newly emerging breed of retail‐industry transnational corporations (TNCs). We situate these firms within the context of ‘relational networks’ and then consider – from a geographical perspective – the complex interplay between ‘extra‐firm’ networks and ‘intra‐firm’ networks, and between store‐based learning and organizational adaptation. We argue that the competitiveness of the retail TNC increasingly rests upon its ability to adapt the portfolio of retail formats to different and rapidly changing business environments by mobilizing and blending knowledge from multiple locations. This, it is suggested, is leading to the emergence of a ‘reflexive’ or ‘hybridized’ model of retail globalization.     

Sociology and development in the 1990s: Critical challenges and empirical trends

Recent transformations of global economic structures have been accompanied by divergent national, regional, and local patterns of development, including severe socioeconomic crises for many Third World countries. At the same time, established conceptualizations of development processes have been called into question by divergent models of social change, such as those of world systems and postmodernist theorists. These phenomena present major analytical challenges for sociologists specializing in the study of development. New technologies and production processes, changing forms of international dependency, and the appearance of new social actors are among the most important topics for study. We argue that political economy, based on midrange propositions and comparative historical methods, constitutes the most fruitful approach to this task.     

City networks and commodity chains: identifying global flows and local connections in Ho Chi Minh City

Any analytical framework for understanding actual forms of the intensified incorporation of cities into the world economy needs to go beyond the exclusive focus on advanced producer services, which is characteristic of most of the World City Network (WCN) approach. Simultaneously, an account of the role of advanced producer services will strengthen Global Commodity Chain (GCC) analysis. A combination of the literatures on WCN and GCC can contribute to a broader conceptualization of the connections and connectivities of global cities. In addition, a combined approach will improve our understanding of globalization processes within many so-called 'third-world' cities that are experiencing booms in export-oriented industrialization and in migration from rural hinterlands as they are being integrated into Global Commodity Chains. We illustrate our argument with insights from GCC analyses of the electronics industry located in Ho Chi Minh City and the agricultural sector in its rural hinterland, the Mekong Delta.     

THE EFFECT OF PROVIDER CONTROL OF BLUE SHIELD PLANS ON HEALTH CARE MARKETS

Blue Shield plans often are granted regulatory advantages by the states in which they operate. Run efficiently, such not-for-profit firms should use these lower costs to eliminate their less advantaged rivals, the commercial insurers. However, these higher-cost commercial providers have been able to offer insurance coverage at prices competitive with the Blues, as evidenced by the fact that Blue plans have, on average, less than 50 percent market share. Similar prices with lower overall costs implies that economic rents are being earned, rents which a not-for-profit firm cannot distribute to owners. In this paper we argue that when there are competing goals among the groups controlling the Blue Shield plans, the different possible "uses" of the regulatory advantage become endogenously determined, necessitating the use of simultaneous equation estimation. Testing this model we find the major effect of doctor-control of Blue Shield plans is to raise doctors' fees while lowering the amount of rents captured by both consumers and administrators.