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Firm behaviour and public infrastructure - The Case of Hungary

Author

Listed:
  • Gabor Bekes

    () (CEU Department of Economics)

  • Balazs Murakozy

    () (CEU Department of Economics)

Abstract

In the paper, we test the effect of local development, regional and local policies on the location decisions and productivity of firms. Development indicators include local research and development activity or education while policy decisions used in this study encompass for example tax rates, investment incentives or road construction. The study builds upon a large national panel of firms. Importantly, such a rich dataset has rarely been employed for productivity and location choice exercises. The paper is composed of two sections dealing with location choice and productivity, respectively and we compare the effect of variables used in both sections. Among others, we find that density of road network positively influenced location choice and productivity as well, while a somewhat larger size of administration helps new firms to settle but later on, it has no effect on productivity.

Suggested Citation

  • Gabor Bekes & Balazs Murakozy, 2005. "Firm behaviour and public infrastructure - The Case of Hungary," IEHAS Discussion Papers 0504, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  • Handle: RePEc:has:discpr:0504
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    File URL: http://econ.core.hu/doc/dp/dp/MTDP0504.pdf
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    Citations

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    Cited by:

    1. Richard Kneller & Florian Misch, 2014. "The Effects Of Public Spending Composition On Firm Productivity," Economic Inquiry, Western Economic Association International, vol. 52(4), pages 1525-1542, October.
    2. Andrea Lasagni & Annamaria Nifo & Gaetano Vecchione, 2015. "Firm Productivity And Institutional Quality: Evidence From Italian Industry," Journal of Regional Science, Wiley Blackwell, vol. 55(5), pages 774-800, November.

    More about this item

    Keywords

    industrial location; FDI; productivity; discrete choice mod-els; GMM;

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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