Voting for staying. Why didn’t the foreign-owned automotive component suppliers relocate their activity from Hungary to lower-wage countries as a response to the economic crisis?

Eric Rugraff and Magdolna Sass

Post-Communist Economies, 2016, vol. 28, issue 1, 16-33

Abstract: On the basis of interviews with 10 foreign-owned automobile component suppliers in Hungary and the collection of indirect information, this article explains why the multinationals did not relocate their activity from Hungary to lower-wage countries as a response to the economic crisis. We suggest that the four ‘keep factors of location’ – additional investments of the automobile manufacturers, unchanged labour market regulation, changes in government policy and the existence of few alternative sites of relocation – were more dominant than the two main ‘push factors of relocation’ – relatively low sunk costs and low dependence on the local environment.

Date: 2016
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DOI: 10.1080/14631377.2015.1124552

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