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Restructuring Networks in Post-SocialismLegacies, Linkages and Localities$
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Gernot Grabher and David Stark

Print publication date: 1996

Print ISBN-13: 9780198290209

Published to Oxford Scholarship Online: October 2011

DOI: 10.1093/acprof:oso/9780198290209.001.0001

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Adaptation at the Cost of Adaptability? Restructuring the Eastern German Regional Economy

Adaptation at the Cost of Adaptability? Restructuring the Eastern German Regional Economy

Chapter:
(p.107) 4 Adaptation at the Cost of Adaptability? Restructuring the Eastern German Regional Economy
Source:
Restructuring Networks in Post-Socialism
Author(s):

Gernot Grabher

David Stark

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780198290209.003.0004

This chapter examines the motives of Western corporations investing in eastern Germany. It illustrates how the initial expectations for economic development in eastern Germany and in Eastern Europe have been disappointed: this is due to the rising labour costs as the anticipation of growing markets faded. Secondly, it reconstructs the strategies adopted by Western corporations to cope with these unforeseen challenges of their investment in eastern Germany. Finally, the chapter evaluates the impacts that these strategies have had on regional development in eastern Germany.

Keywords:   Western corporations, eastern German investment, labour costs, economic development, production networks, regional development

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