Social Sequence Analysis

This chapter poses a new agenda for the field of economic development, asking whether and how foreign investment is integrated into the local networks of host economies. It first presents the basic contours of this case: the Hungarian economy after the collapse of state socialism, the subsequent emergence of interenterprise networks, the demise of state ownership, and the rise of foreign investment. After describing the data collection involved, the chapter charts the changing proportions of the Hungarian economy that are foreign or domestic, and networked or isolated. To identify the microprocesses of interorganizational network formation that explain the macrostructural outcomes, the chapter turns to modeling that makes sequences of network positions the unit of analysis. Finally, this chapter explores the patterns of firms' personnel ties to political parties and then presents findings that demonstrate the relationship between the network sequence pathways, firms' political ties, and levels of foreign investment.