Papers in Evolutionary Economic Geography

March 6, 2018

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

Zoltán Elekes and Ron Boschma and Balázs Lengyel

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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.

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May 27, 2016

# 16.12 Related variety, ownership, and firm dynamics in transition economies: the case of Hungarian city regions 1996-2012

Izabella Szakálné Kanóa, Balázs Lengyel, Zoltán Elekes, Imre Lengyel

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We investigate the effect of related variety on the entry and exit patterns of domestic and foreign firms in Hungarian city regions from 1996-2012. In order to characterize the archetypes of interaction between domestic and foreign firms, we introduce three alternative models to calculate the related variety. The best fit is provided by the model, in which no interaction among foreign and domestic firms is presumed. Related variety in the foreign subset tends to accelerate firm entry and decelerate firm exit in a much earlier stage of economic transition than related variety across domestic firms.

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