Global push and foresight to pull: Black & Decker's Czech investment

Hosein Piranfar and Reza Rasouli

International Journal of Financial Services Management, 2007, vol. 2, issue 3, 175-191

Abstract: International investors with 'footloose capital' have often pushed the host countries into what Keynes (1936) calls a 'beauty contest', which means that they have to give many concessions to attract foreign investment. They receive concessions and leave whenever it suits them and often when the host is just beginning to benefit from the investment. Black & Decker's investment in the Czech Republic looks different. It is likely to be sustainable not because of any moral consideration but because of the appearance of objective conditions for sustainability. Despite the destruction of social capital in the 1990s, human capital survived to make the industrial ecology ripe for sustainable foreign investment. A simple Political, Economic, Social and Technological (PEST) analysis is conducted to illustrate the receptive climate. Wage and productivity gaps are emphasised, though not as the sole factor in the decision to invest.

Keywords: Black & Decker; Czech Republic; globalisation; foreign investment; productivity; skill; sustainability; technology; wages; sustainable development; wage gap; productivity gap; investment decision making; FDI; foreign direct investment. (search for similar items in EconPapers)
Date: 2007
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