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Foreign-owned firms as agents of structural change in regions: the case of Hungary 2000-2009

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  • Zoltán Elekes
  • Ron Boschma
  • Balázs Lengyel

Abstract

A growing body of literature shows that related diversification in regions is more common but unrelated diversification also happens. However, we have little understanding of what types of firms induce related and unrelated diversification in regions. We investigate the extent to which foreign-owned firms induce structural change in the capability base of 67 regions in Hungary between 2000 and 2009. Doing so, we aim to connect more tightly the disparate literatures of Evolutionary Economic Geography and International Business. Using novel methodology developed by Neffke et al. (2018), we find that foreign-owned firms show a higher deviation from the region?s average capability match than domestic firms, and therefore, tend to contribute more to structural change in regions.

Suggested Citation

  • Zoltán Elekes & Ron Boschma & Balázs Lengyel, 2018. "Foreign-owned firms as agents of structural change in regions: the case of Hungary 2000-2009," Papers in Evolutionary Economic Geography (PEEG) 1812, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Mar 2018.
    • Handle: RePEc:egu:wpaper:1812
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    2. Ron Boschma, 2018. "The geographical dimension of structural change," Papers in Evolutionary Economic Geography (PEEG) 1839, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Nov 2018.

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    More about this item

    Keywords

    foreign-owned firms; related diversification; unrelated diversification; evolutionary economic geography; MNEs; international business studies;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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