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R&D-based integration and upgrading in Hungary

Author

Listed:
  • Magdolna Sass

    (Hungarian Academy of Sciences Institute of Economics, Centre for Economic and Regional Studies, Budapest, Hungary)

  • Andrea Szalavetz

    (Hungarian Academy of Sciences Institute for World Economics, Centre for Economic and Regional Studies, Budapest, Hungary)

Abstract

The Hungarian economy is highly integrated in global value chains (GVC). Upgrading within GVCs is a key factor of sustaining the initial developmental push GVC participation provides. The article concentrates on R&D-based upgrading opportunities and their practical implementation by multinationals’ Hungarian subsidiaries in the automotive and electronics sectors. The content and the development of R&D activities; Hungary’s locational advantages for R&D projects, and their local impact are analysed based on interviews with twenty foreign-owned companies in the two selected sectors. We show that local R&D units’ activity is multifaceted, though they feature similar upgrading trajectories. Investors’ motivations: the knowledge- and efficiency-seeking nature of their projects and the related locational advantages are examined. We demonstrate that local R&D-intensive subsidiaries have a limited local impact except for the intensive contacts with local universities — with varying content and motives on the side of the R&D units. Drawing on our findings we formulate economic policy recommendations about the ways to foster and enhance R&D-based upgrading.

Suggested Citation

  • Magdolna Sass & Andrea Szalavetz, 2014. "R&D-based integration and upgrading in Hungary," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 64(supplemen), pages 153-180, November.
    • Handle: RePEc:aka:aoecon:v:64:y:2014:i:supplement1:p:153-180
    Note: The authors gratefully acknowledge the support of European Union’s Seventh Framework Programme (FP7/2007-2013) under grant agreement “Growth-Innovation-Competitiveness: Fostering Cohesion in Central and Eastern Europe” (GRINCOH) and of the Hungarian National Scientific and Research Fund (K83982). The authors are grateful to Péter Mihályi and to participants of the 2013 EAEPE conference for their comments on an earlier version of the article. Two anonymous referees provided valuable remarks and suggestions.
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    Cited by:

    1. Nebojša Stojčić & Matija Matić, 2023. "A Journey Toward Global Value Chain Upgrading: Exploring the Transition from Backward to Forward Integration," EFZG Working Papers Series 2308, Faculty of Economics and Business, University of Zagreb.
    2. Kiss, János, 2022. "Innovatívabbak-e a termelékeny és az exportáló vállalatok? Egy magyar feldolgozóipari minta elemzése [Are productive and exporting companies more innovative? Analysis of a sample of Hungarian mediu," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(4), pages 502-516.
    3. Andrea Elteto & Andrea Szalavetz & Gabor Tury & Aniko Magashazi, 2015. "Upgrading of Hungarian subsidiaries in machinery and automotive global value chains," IWE Working Papers 217, Institute for World Economics - Centre for Economic and Regional Studies.
    4. Nebojša Stojčić & Matija Matić, 2023. "A Journey Toward Global Value Chain Upgrading: Exploring the Transition from Backward to Forward Integration," EFZG Working Papers Series 2308, Faculty of Economics and Business, University of Zagreb.

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    More about this item

    Keywords

    research and development; global value chains; upgrading; Hungary;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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