Cross-border Inter-firm Networks in the European Union's Eastern Neighbourhood: Integration via Organizational Learning

The European Union (EU) is seeking to generate stronger integration in the wider Europe without further enlargement by involving its immediate neighbours in various regional partnerships. What are the effects of such co-operation across the eastern borders of the EU and what are the prospects for bringing this region's countries closer to the EU without offering them the possibility of formal EU membership? Using the tools of social network analysis and regression methods, this article investigates the effect of the EU's external governance on the previously neglected societal level by focusing on cross-border inter-firm networks. The findings show that the diffusion of organizational practices is occurring within these networks which have emerged as the result of EU governance efforts abroad. The article explores the causal mechanisms of this diffusion, and also identifies factors that impede or catalyze the transfer of organizational practices. It also points to the relevance of neofunctionalism in explaining integration between the EU and its eastern neighbours.