Eastern European marketing systems and Western marketing research voids: A research agenda
Abstract Starting with detente, there has been a marked improvement in North American trade with the U.S.S.R. and other Eastern European countries. This trend is predicted to continue at an accelerating rate in the years ahead. Despite this, trading and business systems of these countries are not likely to alter much. In most cases, planned purchases are going to continue, although the intensity may vary. Public policy makers in these countries decide well in advance what type of products or services they are going to purchase, because their purchases must conform with the goals of the annual foreign trade plan and the allocations of foreign exchange available for that particular purchase. Most aspects of Eastern European markets and marketing practices are not well known by North American company managers dealing with these countries. In most cases, lack of information about these markets often leads to misunderstanding and, hence, lost opportunity. The purpose of this article is to determine the critical research voids in an effort to facilitate the expansion of North American-Eastern European trade. To this end, a four-step procedure is proposed to pinpoint areas of research for immediate attention.
Multinational corporations: Trade and investment across the East‐West divide
East-West trade and investment remains a preserve of the multinational corporations due to their resources in finance, manpower and production which enables them to absorb the attendant costs of lengthy negotiations; to meet the occasional high-volume order placed by a state foreign trade enterprise purchasing on behalf of an entire sector of industry; to aid the state foreign trade enterprise by sourcing from a world-wide network so as to alleviate currency or distribution problems; and to help with the provision of finance or to agree to part payment by means of the resultant product produced under licence. Size is an important factor, and many of the joint ventures concluded over the last ten years have been for massive investment projects. These joint ventures are of a contractual type and referred to as industrial cooperation agreements' which involve repurchase of the goods produced under licence, often to a value which repays over a specified time the capital borrowed plus interest charges. These counter-trade agreements have become more popular in the Eastern bloc because of their ‘self-financing’ principle but are beginning to face mounting criticism in the West, currently facing a trade recession and the echoing pleas for trade protectionism to curb the threat of cheap Eastern imports upon Western job security. Industrial cooperation has been diverted towards the more export intensive branches of the socialist economies and has led to the increasing size and importance of certain of their production enterprises. This has created Western fears of the advent of the ‘socialist multinationals’ or Socialist Common Enterprises. However, industrial cooperation is a recent phenomenon, and if only by default, a strategy will emerge in future years as to the pattern and behaviour of East-West multinational arrangements.
East Europe's debt to the West: interdependence is a two-way street
A policy analysis of East--West economic interdependence examines the implications that capital export into Eastern Europe has for the new economic order. Although the East European debt is smaller than that of non-OPEC less-developed countries (LDCs), it is significant in the Euromarket. As an oil exporter, Eastern Europe's debts are not the result of oil deficits and must be considered to have different economic, political, and strategic bases. The possibility of requests to treat these debts with the same arrangements negotiated for the LDCs needs to be taken under consideration as economic policy is formulated. Less debt servicing data are available from these centralized countries, making decisions based on default predications more difficult. Debt reduction by the East European countries can only be accomplished by a movement of manufactured goods to the West and a resistance in the West to trade discriminations. The interdependence that has developed should bring Eastern European countries into the discussions of their economic credibility and their involvement in the international monetary system. (DCK)