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

Zoltán Elekes, Ron Boschma and Balázs Lengyel

No 1812, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

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.

Keywords: foreign-owned firms; related diversification; unrelated diversification; evolutionary economic geography; MNEs; international business studies (search for similar items in EconPapers)
JEL-codes: F23 O18 O19 O33 P25 R11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-geo, nep-int and nep-tra
Date: 2018-03, Revised 2018-03
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Persistent link: https://EconPapers.repec.org/RePEc:egu:wpaper:1812

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