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Agglomeration economies and location choice: "Foreign direct investment in Hungary" -super-1

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  • Fabienne Boudier-Bensebaa

Abstract

Since the beginning of the transition process, Hungary has attracted a significant amount of foreign direct investment (FDI), although this is unevenly distributed among the twenty Hungarian counties. This paper examines the determinants of FDI at a regional level in Hungary and more particularly assesses the importance of agglomeration effects among determinants. A panel model of the location determinants of FDI in Hungary is developed and estimated. Empirical testing suggests that counties with higher labour availability, greater industrial demand and higher manufacturing density attract more FDI. Surprisingly, higher unit labour costs attract FDI. In addition, inter-industrial agglomeration economies and infrastructure availability are found to be important. Copyright (c) The European Bank for Reconstruction and Development, 2005.

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Bibliographic Info

Article provided by The European Bank for Reconstruction and Development in its journal Economics of Transition.

Volume (Year): 13 (2005)
Issue (Month): 4 (October)
Pages: 605-628

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Handle: RePEc:bla:etrans:v:13:y:2005:i:4:p:605-628

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Cited by:
  1. Andrea Gauselmann & Philipp Marek, 2012. "Regional determinants of MNE’s location choice in post-transition economies," Empirica, Springer, vol. 39(4), pages 487-511, November.
  2. Laura CASI & Laura RESMINI, 2010. "Evidence on the determinants of foreign direct investment: the case of EU regions," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 1, pages 93-118, December.
  3. Lionel Artige & Rosella Nicolini, 2006. "Evidence on the Determinants of Foreign Direct Investment. The Case of Three European Regions," CREPP Working Papers 0607, Centre de Recherche en Economie Publique et de la Population (CREPP) (Research Center on Public and Population Economics) HEC-Management School, University of Liège.
  4. Holger Görg & Henning Mühlen & Peter Nunnenkamp, 2009. "Firm Heterogeneity, Industry Characteristics and Types of FDI: The Case of German FDI in the Czech Republic," Kiel Working Papers 1544, Kiel Institute for the World Economy.
  5. Bellak, Christian & Leibrecht, Markus & Riedl, Aleksandra, 2008. "Labour costs and FDI flows into Central and Eastern European Countries: A survey of the literature and empirical evidence," Structural Change and Economic Dynamics, Elsevier, vol. 19(1), pages 17-37, March.
  6. Kawai, Norifumi, 2006. "Spatial determinants of Japanese manufacturing firms in the Czech Republic," Duisburger Arbeitspapiere Ostasienwissenschaften 71/2006, University of Duisburg-Essen, Institute of East Asian Studies IN-EAST.
  7. Chidlow, Agnieszka & Salciuviene, Laura & Young, Stephen, 2009. "Regional determinants of inward FDI distribution in Poland," International Business Review, Elsevier, vol. 18(2), pages 119-133, April.
  8. Lefilleur, Julien & Maurel, Mathilde, 2010. "Inter- and intra-industry linkages as a determinant of FDI in Central and Eastern Europe," Economic Systems, Elsevier, vol. 34(3), pages 309-330, September.
  9. Andrzej CieŚlik, 2013. "Determinants of the Location of Foreign Firms in P olish Regions: Does Firm Size Matter?," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 104(2), pages 175-193, 04.
  10. C. Dembour, 2008. "Competition for Business Location: A Survey," Journal of Industry, Competition and Trade, Springer, vol. 8(2), pages 89-111, June.
  11. Laura Resmini & Laura Casi, 2011. "The determinants of foreign direct investments: Regional vs. National characteristics," ERSA conference papers ersa10p466, European Regional Science Association.
  12. Barbara M. Roberts & Steve Thompson & Katarzyna Mikolajczyk, 2008. "Privatization, Foreign Acquisition and the Motives for FDI in Eastern Europe," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 144(3), pages 408-427, October.
  13. Agnieszka Chidlow & Stephen Young, 2008. "Regional Determinants of FDI Distribution in Poland," William Davidson Institute Working Papers Series wp943, William Davidson Institute at the University of Michigan.
  14. Chen, George Shih-Ku, 2009. "Agglomeration economies and the location of Taiwanese investment in China," MPRA Paper 13896, University Library of Munich, Germany.
  15. Jacob A. Jordaan, 2012. "Agglomeration and the location choice of foreign direct investment: new evidence from manufacturing FDI in Mexico," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 27(1), pages 61-97.

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