Industrial concentration, regional employment and productivity growth - evidence from the late transition period of Hungary

Miklos Szanyi (), Ichiro Iwasaki and Balázs Lengyel
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Miklos Szanyi: Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences

No 195, IWE Working Papers from Institute for World Economics - Centre for Economic and Regional Studies

Abstract: This paper investigates how a static value of regional concentration affects employment and productivity growth over time in less-developed regions. Regression models are built to test major hypotheses of regional growth theories, namely the effects of concentration, competition and diversity on employment and productivity growth. Our findings suggest that agglomeration economies might have slimmer relevance in the growth of less-developed regions concerning employment growth. However, regional concentration has strong significant effect on productivity growth in each industry. The evidence found highlights that investments and consequently employment growth are led by local market motivations, while MAR knowledge externalities play a more important role in productivity growth. We will also show that a bunch of co-located small firms are more likely to improve employment; while productivity growth occurs in concentrations with big firms present.

Keywords: regional concentration; employment growth; productivity growth; less developed regions; transition economy (search for similar items in EconPapers)
JEL-codes: O18 P25 R11 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2011-02
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Persistent link: https://EconPapers.repec.org/RePEc:iwe:workpr:195

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