This chapter examines how multinational enterprises (MNEs)
headquartered in the region or investing from outside manage
their production capacities in Central and Eastern Europe
(CEE) through inward and outward foreign direct investment
(FDI), or other forms of engagement of those firms in host
countries. It shows that Western and intra-regional MNEs
adjust their strategies to local conditions dictated by the
regulatory framework of individual host countries, the
availability and quality of local business partners, and the
quality of available skills and infrastructure. It points at
different ways through which local and international MNEs
adapt their production plans to a context that in the bulk of
the region can be called “post-transition.” These choices in
turn affect the decisions that different types of MNEs take
in locating various parts of their value chains in the
region, and their strategies vis-à-vis the upgrading or
relocation of existing capacities.
