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Effects of FDI Inflows on Regional Labour Market Differences in Hungary


  • Karoly Fazekas


Post-transitional labour markets of the Central and East European countries have been characterised by marked regional differences. This paper will concentrate on the spatial pattern of job creation, determined by the allocation decisions of foreign and domestic investors. Regions with the highest employment rates may boast high doses of FDI inflows, while low employment regions have been suffering from the persistent lack of outside investments. The paper describes the regional distribution of foreign and domestic employment. The second section analyses the spatial distribution of FDI and domestic firms’ employment, and points out the most important explanatory factors of their regional distribution. The third section discusses the time path of regional labour market differences in Hungary and measures the impact of foreign firms’ net job creation on employment, in high and low employment regions. The last section concludes with some policy relevant messages.

Suggested Citation

  • Karoly Fazekas, 2005. "Effects of FDI Inflows on Regional Labour Market Differences in Hungary," Economie Internationale, CEPII research center, issue 102, pages 83-105.
  • Handle: RePEc:cii:cepiei:2005-2td

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    Cited by:

    1. Zouhour Karray & Slim Driss, 2008. "Regional Growth in Tunisia: Economic Geography Forces and Industrial Structure," Working Papers 419, Economic Research Forum, revised 06 Jan 2008.
    2. Zouhour KARRAY & Slim DRISS, 2009. "Structure Industrielle, Économies D’Agglomeration, Ouverture Et Croissance Régionale En Tunisie," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 29, pages 141-157.
    3. Villaverde, José & Maza, Adolfo, 2015. "The determinants of inward foreign direct investment: Evidence from the European regions," International Business Review, Elsevier, vol. 24(2), pages 209-223.

    More about this item


    Labor market; FDI; transitional economies; Hungary;

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)


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