Foreign direct investment, institutional context and the changing polish pig industry

Abstract

The world's meat market has had tremendous growth in the past decades. Global meat producers, particularly in developed economies, have grown bigger through expansion, mergers and acquisitions. The livestock markets in less developed countries are particularly the prime targets for investments by these producers. This article looks at foreign direct investment in a transitional economy, using Poland's pig industry as the empirical case study. It argues that such investments not only bring significant changes in the method of producing meat in the host country; they also have particular socio-political impacts and have thus been met with some level of resistance by local communities. Our study suggests that the relations of foreign firms to the local community are crucial for their long term presence; and these relations are in turn dependent on a gamut of place specific features and the firms' broader corporate philosophy and strategy. In general, foreign firms need to find ways to replicate the kinds of deep social-economic links between the livestock industry and places that existed in the socialist era. The case studies of Americanowned Agri Plus and Danish-owned Poldanor illustrate some of the difficulties involved in the foreign investment in the meat industries while demonstrating the viability and possibility of such companies becoming more accepted and welcomed in the local communities. Notes1. The present article is drawn in part from Micek et al. (2009).

The embeddedness of transnational corporations in Chinese cities: Strategic coupling in global production networks?

“…Scholars influenced by dependency theory, the world system perspective and, more recently, the GVC/GCC approaches (e.g., Amin & Thrift, 1994;Gereffi & Korzeniewicz, 1994;Taylor & Thrift, 1982) hold that FDI can induce structural displacement, financial instability, and external control of developing economies (Agenor, Miller, Vines, & Weber, 2000). Geographers and planners tend to celebrate the power of local assets and processes and the efficacy of local institutional capacities (Micek, Neo, & Gorecki, 2011;Phelps & Waley, 2004). They argue for the continued significance of the state in FDI location decisions, the localization and embeddedness of global capital, and the reemergence of industrial districts and clusters (e.g., Cox, 1997;Dicken, 2003).…”

Development of Livestock Sector in Tanzania - a joint approach with China

“…These states include an advanced level of technology and innovations (UNCTAD, 2011), Infrastructure improvements and better living standards of the people in their lifestyle. These states also include the development of various government structures, such as a good system of representation, the rule of law, and less corruption and good environment climate to attract investors without forgetting the development of research institutions (Micek et al, 2011b).…”

Transnational Networks of Pork Production: Fragile Linkages between Germany and CEE Countries

“…The institutional framework is particularly important for the analysis of agrifood networks and value chains in transition economies such as those in Central and Eastern Europe, where the fall of the Iron Curtain in 1989 resulted in a rapid and drastic transformation of the political, social and economic structures. In the course of this transformative environment, the former socialist countries have been converged to market-driven economies which strongly affected the region's agri-food industry (Czaban and Henderson, 2003;Lerman et al ., 2004;Micek et al, 2011;Müller et al ., 2009). This restructuring process marked by liberalization, deregulation and privatization not only triggered new organizational structures of food value chains, but also created growing demand for standardised large-scale production (Dannenberg and Kümmerle, 2010).…”

“…This restructuring process marked by liberalization, deregulation and privatization not only triggered new organizational structures of food value chains, but also created growing demand for standardised large-scale production (Dannenberg and Kümmerle, 2010). Due to these changing market conditions in CEE countries, lucrative added value potentials have been arisen, particularly for agribusiness firms from Western Europe and the United States (Micek et al, 2011). This also applies to German agri-food producers which cur-rently intensify their business activity in markets like Poland, the Czech Republic or Romania.…”

“…In view of the transition to market-based economies, the former post-socialist CEE countries basically offer promising opportunities for foreign direct investments which also applies to the pork industry. For example, the US Smithfield group, which was taken over by the Chinese Shuanghui International Holding in 2013, has made several investments in CEE during the 1990s and 2000s (Micek et al, 2011). These internationalization strategies were mainly based on acquisitions of existing pork producers which already had a strong or expandable position in the respective markets.…”