This article enlarges the existing literature on the varieties of capitalism by identifying a third basic variety that does not resemble the liberal market economy or coordinated market economy types. The dependent market economy (DME) type, as it is named by the authors, is characterized by the importance of foreign capital for the socioeconomic setup and is located in postsocialist Central Europe. Since the collapse of state socialism in the late 1980s, the Czech republic, Hungary, poland, and the slovak republic have introduced a rather successful model of capitalism when compared with other postsocialist states. This article identifies the key elements of the DME model and discusses their interplay. DMEs have comparative advantages in the assembly and production of relatively complex and durable consumer goods. These comparative advantages are based on institutional complementarities between skilled, but cheap, labor; the transfer of technological innovations within transnational enterprises; and the provision of capital via foreign direct investment
The European Union (EU) has a crucial influence on the institutional development of corporate governance structures in Central Eastern Europe (CEE). As most political forces in the region favoured quick entry to the EU, one outcome has been an asymmetrical power balance between European regulators and national socio-economic configurations. We identify the EU's objectives and strategy with regard to the restructuring of corporate governance as crucial to understanding the role the EU is playing within the transformation of governance structures in CEE. Using the case of the banking and financial sector in the Czech Republic we analyse the changing regulatory framework of corporate governance. Central to our analysis is the role of the European Commission, which as a transnational actor, has played a major role in promoting and advocating regulatory policies conducive to further embedding socio-economic structures in CEE into the transnational political economy of neoliberal capitalist restructuring.
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