Berkeley Roundtable on the International Economy

Automakers have been among the first western firms to enter Central and Eastern Europe. In automobile production and distribution, International Production Networks (IPNs) linking West and East Europe are emerging. The international networking strategies of the car manufacturers, however, show remarkable differences. Some rate the CEEC region primarily as a market, some as a production site, some try to aim at both. These differences are triggered by the domestic bargaining setting (the 'car complex') of these firms, by the dynamics of the internationalisation process itself, and by the reception in the host countries. Four different types of cross-national production networks in Europe have developed in the course of the 1990s: frontrunner, follower, peripheral and lock-out networks. These networks represent decreasing degrees of involvement in the CEEC region. Consequently, countries in Central and Eastern Europe will have different prospects of integrating into the European Union and developing autonomous domestic industrial structures. The radically altered patterns of intra-European trade further illustrates the importance of the intra-European production networks.