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Newsletter 1/2020

January - March

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Research community efforts

In this unusual period of time, one of the most important responsibilities of European research communities are to collect scientific evidence on the impact of COVID19. The Regional Studies Association (RSA) is collating resources and evidence on how regions, cities, and industry around the world are dealing with the impact of the COVID19. The European Regional Science Association (ERSA) is organising a consultation on the spatial, economic and social impacts of Coronavirus. EU Institutions and other organisations are making the same efforts to collect best practices and actions local and regional authorities are implementing to support their citizens. Social Economy Initiative, Committee of the Regions, European Investment Bank are only a few from the many of initiators. On the website of ESPON 2020 there is a long list of European initiatives compiled and updated regularly.

Project updates

Business disruptions from social distancing. Miklós Koren (Institute of Economics, IE) and Rita Pető (IE) investigated in their recent paper which of the US business relies most on face to face human interactions either during production or providing services, therefore being more prone to the economic harms of social distancing measures. They find that 49 million workers rely heavily on face-to-face communication or require close physical proximity to other workers. Their model suggests that when businesses are forced to reduce worker contacts by half, they need a 12% wage subsidy to compensate for the disruption in communication. Read more

Startups in the shadow of the coronavirus. Although startups hold great hopes for the future, they might possibly become the first victims of the current crisis. Similarly to other areas of the economy, they need government aid to survive; however, replacing market considerations with state bureaucracy should be avoided here as well. The methods introduced in Western Europe also point in this direction. Karsai Judit (IE) reflects on the long term survival prospects of start-ups in light of the crisis behaviour patterns of venture capital industry. Read more

„New tendencies in the development of business incubation institutions in Central and Eastern Europe,” supported by the National Research Development and Innovation Fund, Hungary.

Healthcare spending inequality: evidence from Hungary. Using administrative data on a random 50% of the Hungarian population, including individual-level information on incomes, healthcare spending, and mortality for the 2003–2011 period, Anikó Bíró (IE) and Dániel Prinz (Harvard University)  developed new evidence on the distribution of healthcare spending and mortality in Hungary. They documented four patterns and argue these patterns suggest that individuals with higher labor income are in better health conditions but still consume more healthcare because of their better access to services. Read more

Health and population ─ Momentum Grant of the Hungarian Academy of Sciences, July 2018 — June 2023.

Central and South-eastern European metropolises. Despite the existence of a vast amount of literature on the post-socialist transition processes, there is a relative scarcity of international comparative studies on Central and Southeast European metropolises. The research of Szilárd Rácz (Institute of Regional Studies, IRS) seeks to explore FDI-driven transformation and development processes in Central and Southeast European regional centres in the post-transition period. A recently published article provides a brief summary of the first phase of the research constituted by literature review. Read more

Supported by the ÚNKP-18-4 New National Excellence Program of the Ministry of Human Capacities (Bolyai+ scholarship) Hungary

Local solutions for housing challenges. The share of home-ownership in Hungary stands at a remarkable 90% which increasingly limits social mobility. Housing deprivation is the highest in Hungary In comparison to other Visegrád countries (Czechia, Poland, Slovakia). Although Hungarian local governments have limited financial means to implement progressive housing policies, they could still play a crucial role in alleviation of the effects of the current housing crisis on a local level. The study of Márton Czirfusz (IRS) summarises the room for manoeuvre at Hungarian local governments’ hand for putting forward progressive housing policies under the current national legislative framework. Read more

Spatial inequalities in Hungary. The EU funded research collaboration RELOCAL (Resituating the local in cohesion and territorial development) seeks to uncover the current state of social and spatial inequalities in Europe in general and in 12 countries in particular. The research team of the Institute for Regional Studies – Csaba Jelinek, Judit Keller, Katalin Kovács – presented the Hungarian country report providing insight into diverse examples of development and their broader contexts. Two of the case studies (György-telep, Encs) explore interventions aiming the inclusion of people condemned to social and spatial marginality; one in an urban, the other in a rural context. The other two case studies represent ordinary rural areas facing “average” challenges and opportunities (Balaton Uplands LEADER LAG and the Producer Organisation of Szentes). Read more

Resituating the local in cohesion and territorial development (2016-2020) supported by the EU Horizon 2020 programme, See list of project participants here

China’s growing footprint in Central Eastern Europe. Relations between China and Central and Eastern Europe are growing, encompassing political, economic and societal domains. The China-led 17+1 cooperation platform, despite the standard claim of lacking substance, is in fact loaded with actions. A recent policy study prepared by Ágnes Szunomár (Institute of World Economics, IWE) and nine other Eastern European experts evaluates the roll and success of the platform. They paint a broad picture of the areas of interaction in different countries shading lights on several hidden facts about Chinese FDIs which are modest and concentrated in a few countries (Hungary, Czechia and Poland) with almost no opportunity for other countries to receive sizable amounts of investment.  Read more

China Observers in Central and Eastern Europe (CHOICE) collaborative platform, Coordinator: Association for International Affairs (AMO), Prague

Publication highlights

 

Baráth Lajos ─   Fertő Imre ─ Hockmann, Heinrich: Technological differences, theoretical consistency, and technical efficiency : the case of Hungarian crop-producing farms. Sustainability Vol. 12. No. 3. 2020. Paper 1147.

Effective agricultural policymaking requires the accurate estimation of the production technology and efficiency of farms. However, several methodological issues should be considered when modelling production and estimating technical efficiency. In this paper, we focus on two of these—technological heterogeneity and theoretical consistency—as implied in microeconomic theory. Our findings show that heterogeneity has a greater effect on variation in output than technical efficiency; furthermore, the violation of theoretical consistency significantly influences the results. These findings also reveal that the explanatory power of regional natural and economic conditions is significant but not sufficient on the variance of estimated unobserved heterogeneity. Read more

Csáfordi Zsolt ─ Lőrincz László ─ Lengyel Balázs ─ Kiss Károly Miklós: Productivity spillovers through labor flows: productivity gap, multinational experience and industry relatedness. Journal of Technology Transfer Vol. 45. 2020. pp. 86─121.

Labor flows are important channels for knowledge spillovers between firms; yet competing arguments provide different explanations for this mechanism. Firstly, productivity differences between the source and recipient firms have been found to drive these spillovers; secondly, previous evidence suggests that labor flows from multinational enterprises provide productivity gains for firms; and thirdly, industry relatedness across firms have been found important, because industry-specific skills have an impact on organizational learning and production. In this paper, we aim to disentangle the effects of productivity gap, multinational experience and industry relatedness in a common framework. Hungarian employee–employer linked panel data from 2003–2011 imply that the incoming labor from more productive firms is associated with increasing future productivity. The impact of multinational spillovers cannot be confirmed, once productivity differences between the firms are taken into account. Furthermore, we find that flows from related industries outperform the effect of flows from same and unrelated industries even if we control for the effects of productivity gap and multinational spillovers. Read more

Lénárd Tünde ─ Horn Dániel ─ Kiss Hubert János: Does politicizing ‘gender’ influence the possibility of conducting academic research? Evidence from a randomized controlled trial. Economics Letters Vol. 189. 2020. Paper 109022.

We detect a significant negative effect of mentioning ‘gender’ as a research topic on conducting academic research in Hungary. Using a randomized information treatment involving a comprehensive sample of Hungarian education providers we find that they are less willing to cooperate in a gender-related future research compared to a research without this specification. Our results also indicate that this negative sentiment is clearly against gender and not against any topic covering social inequalities in general. Read more

 

Szabó John ─ Fabók Márton: Infrastructures and state-building: comparing the energy politics of the European Commission with the governments of Hungary and Poland. Energy Policy Vol. 138. 2020. Paper 111253.

Energy is the lifeblood of a state’s economy, which leads energy infrastructures to form intricate relations with state-building. We assess how state-building and energy infrastructures are intertwined and shape one-another. To explore this nexus, we have developed a novel framework that traces the ideology, the political economy, and the technopolitics in this relation. Through case studies focusing on the actions of the European Commission alongside those of the self-proclaimed illiberal governments of Hungary and Poland, we convey the variegated approaches embodied in the state-building – energy infrastructure relation. Read more

Komlósi Éva ─ Páger Balázs ─ Márkus Gábor: Entrepreneurial Innovations in Countries at Different Stages of Development. Foresight and STI Governance Vol. 13. No. 4. 2019 p. 23─34.

The aim of our paper is to provide a comprehensive picture of the role of innovation within the entrepreneurial ecosystem in certain countries. In this way, we propose the following research question as to what kind of interrelatedness can be observed between the innovation capability of a country and other elements of its entrepreneurial ecosystem. Ninety-five countries have been involved in our analysis, which initially have been grouped by their level of economic development and a group of transition countries has been created as well. In order to measure these relations, the Global Entrepreneurship Index (GEI) was applied. This index measures the qualitative aspects of the entrepreneurial ecosystem in a national context. The index consists of fourteen pillars covering the relevant aspects of the entrepreneurial ecosystem. Read more

More recent publications >>>

 

Conference presentations

5th Geography of Innovation Conference, Stavanger, Norway, 29─31 January, 2020

Czaller László: Automation and cities

Automation risk has been shown among urban areas with different size but less is known about what drives the observed differences. Since automation risk is usually measured with the level of occupations, it reflects various socio economic factors that determine local occupational structure. In this paper we analyse the extent to which cities affect automation risk differences. To identify the pure effect of working in the city, we use administrative data on a panel of Swedish workers from 2005 to 3013 and find that working in any of the largest metropolitan areas of Sweden increases the chance of having a job attributed with low automation risk. Separate estimates for different education groups reveals that the dynamic effect of additional years of urban experience matters for high-skilled workers only, while the one off static effect of moving favours low-skilled workers.  

Juhász Sándor: Explaining dynamics of relatedness: the role of co-location, complexity and collaboration

Relatedness has become a key concept for studying diversification of firms, regions, and countries. However, studies tend to treat relatedness between activities as being time-invariant and consider its evolution as exogenously given. This study argues that relatedness is inherently dynamic and endogenous to technological and economic developments. Using patent data, we test empirically the extent to which relatedness between technologies in Europe has been shaped by co-location, complexity and collaboration during the period 1980─2010. Our results show that co-location and complexity of technologies influence the emergence and increase of relatedness over time. Moreover, we show that collaboration between inventors mediates these effects.

Both studies are soon to be published, please contact the authors with questions.

 

Editor: Zsuzsa Balaban
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