ELTE Centre for Economic and Regional Studies

Social distancing interventions can be effective against epidemics but are potentially detrimental for the economy. Businesses that rely heavily on face-to-face communication or close physical proximity when producing a product or providing a service are particularly vulnerable. There is, however, no systematic evidence about the role of human interactions across different lines of business and about which will be the most limited by social distancing. Here we provide theory-based measures of the reliance of U.S. businesses on human interaction, detailed by industry and geographic location. We find that, before the pandemic hit, 43 million workers worked in occupations that rely heavily on face-to-face communication or require close physical proximity to other workers. Many of these workers lost their jobs since. Consistently with our model, employment losses have been largest in sectors that rely heavily on customer contact and where these contacts dropped the most: retail, hotels and restaurants, arts and entertainment and schools. Our results can help quantify the economic costs of social distancing.

This study analyzes how the entrepreneurial ecosystem and different types of entrepreneurship impact regional performance. By analyzing 121 European Union regions between 2012 and 2014, it is found that quantity (Kirznerian) entrepreneurship negatively impacts regional performance, while this effect turns positive in the case of quality (Schumpeterian) entrepreneurship. Also, regions with a healthy entrepreneurial ecosystem have a greater capacity to materialize the effects of high business-formation rates, regardless of their quality (Kirznerian entrepreneurship), while regions with weak entrepreneurial ecosystem may rely on innovative (Schumpeterian) entrepreneurs to compensate for the absence of entrepreneurship support policies and increase their economic outcomes.

Social networks amplify inequalities by fundamental mechanisms of social tie formation such as homophily and triadic closure. These forces sharpen social segregation, which is reflected in fragmented social network structure. Geographical impediments such as distance and physical or administrative boundaries also reinforce social segregation. Yet, less is known about the joint relationships between social network structure, urban geography, and inequality. In this paper we analyze an online social network and find that the fragmentation of social networks is significantly higher in towns in which residential neighborhoods are divided by physical barriers such as rivers and railroads. Towns in which neighborhoods are relatively distant from the center of town and amenities are spatially concentrated are also more socially segregated. Using a two-stage model, we show that these urban geography features have significant relationships with income inequality via social network fragmentation. In other words, the geographic features of a place can compound economic inequalities via social networks.

This paper considers how far suburbanization in Hungary has followed the Western model. The authors argue that the transition period, as a distinctive era, will not bring about fundamental changes in the cause-and-effect relationships of surburban development. The decisive role of capital in Hungarian suburbanization is evident in the uneven development of this spatial process. It is contended that the actors in the suburbanization of transition, although labelled ‘distinctive’ by some commentators, do not have a trajectory which is essentially different from that of their western counterparts. Differences arise from the means and pace of acquiring property and capital. As in advanced capitalism, suburbanization in Hungary results in social tensions, segregation and exclusion.

The COVID-19 pandemic has been a major stress test for the agri-food system. While most research has analysed the impact of the pandemic on mainstream food systems, this article examines how alternative and local food systems (ALFS) in 13 countries responded in the first months of the crisis. Using primary and secondary data and combining the Multi-Level Perspective with social innovation approaches, we highlight the innovations and adaptations that emerged in ALFS, and how these changes have created or supported the sustainability transition in production and consumption systems. In particular, we show how the combination of social and technological innovation, greater citizen involvement, and the increased interest of policy-makers and retailers have enabled ALFS to extend their scope and engage new actors in more sustainable practices. Finally, we make recommendations concerning how to support ALFS' upscaling to embrace the opportunities arising from the crisis and strengthen the sustainability transition.

Many of the facts about the extensive margin of trade—which firms export, and how many products are sent to how many destinations— are consistent with a surprisingly large class of trade models because of the sparse nature of trade data. We propose a statistical model to account for sparsity, formalizing the assignment of trade shipments to country, product, and firm categories as balls falling into bins. The balls-and-bins model quantitatively reproduces the pattern of zero product- and firm-level trade flows across export destinations, and the frequency of multiproduct, multidestination exporters. In contrast, balls-and-bins overpredicts the fraction of exporting firms. ( JEL F11, F14)

Worldwide, due to rapid urbanization, the provision of urban green spaces (UGSs) has become a primary goal of urban planning. As such, research on the benefits, effects, and challenges of UGSs has gained widespread attention among scholars. This paper comprehensively analyzes three decades of UGS research and its evolution; it conducts a bibliometric analysis of approximately 4000 articles and reviews from the Web of Science platform to discover the patterns and trends characterizing UGS research over time. We found that the pioneers of initial UGS research were the United States and Canada, whereas recently the European Union and China have become the global engines of research in the field. UGS research initially focused on studying urban forests, gradually shifting toward green spaces located in inner urban areas. Early on, researchers investigated UGSs (i.e., urban forests) from an ecological perspective. However, the most current research phase focuses on the social aspects of UGSs, characterized by such keywords as environmental justice and accessibility. Furthermore, the introduction of geographic information systems (GIS) has given new impetus to the evolution of UGS research and has remained the most used technological advancement besides remote sensing techniques. As the social aspects of UGS research have gained importance, new research methods have been employed, such as machine learning, big data and social media data analysis, and artificial intelligence, most recently.

This paper investigates the role of different types of firms in related and unrelated diversification in regions, in particular the extent to which foreign-owned firms induce structural change in the manufacturing capability base of 67 Hungarian regions between 2000 and 2009. Doing so, it connects more tightly the literatures of evolutionary economic geography and international business. The results indicate that foreign-owned firms deviate more from the region's average capability match than domestic-owned firms. However, this deviation is larger on the short run than in the long run, and more pronounced in peripheral regions and in the capital region.

This article investigates the differences in the application and impact of digital technologies between manufacturing subsidiaries and lead companies, the principal orchestrators of global automotive value chains. Utilising a dataset of 10 in-depth interviews with automotive industry actors, we analyse headquarters–subsidiary differences in the patterns of digitalisation-driven upgrading. A theoretical framework is offered that explains why the significant upgrading achievements of manufacturing subsidiaries deploying industry 4.0 technologies will not reduce the gap between lead companies and manufacturing subsidiaries in terms of value generation. We show that the concept of ‘industry 4.0’ is much narrower than that of ‘digitalisation’ and transition to smart factories is only part of the digital transformation story. Industry 4.0 technologies contribute to the upgrading of operations, and enable subsidiaries to take on production-related knowledge-intensive assignments (functional upgrading). Conversely, digitalisation serves lead companies’ strategic differentiation efforts, and facilitates achieving competitive advantage: the latter are crucial for value capture.

What is the effect of imports on productivity? To answer this question, we estimate a structural model of producers using product-level import data for a panel of Hungarian manufacturing firms from 1992 to 2001. In our model with heterogenous firms, producers choose to import or purchase domestically varieties of intermediate inputs. Imports affect firm productivity through expanding variety as well as improved input quality. The model leads to a production function where the total factor productivity of a firm depends on the share of inputs imported. To estimate this import-augmented production function, we extend the Olley and Pakes (1996) procedure for a setting with an additional state variable, the number of input varieties imported. Our results suggest that the role of imports is both statistically and economically significant. Imports are responsible for 30% of the growth in aggregate total factor productivity in Hungary during the 1990s. About 50% of this effect is through imports advancing firm level productivity, while the remaining 50% comes from the reallocation of capital and labor to importers.

How is online social media activity structured in the geographical space? Recent studies have shown that in spite of earlier visions about the "death of distance", physical proximity is still a major factor in social tie formation and maintenance in virtual social networks. Yet, it is unclear, what are the characteristics of the distance dependence in online social networks. In order to explore this issue the complete network of the former major Hungarian online social network is analyzed. We find that the distance dependence is weaker for the online social network ties than what was found earlier for phone communication networks. For a further analysis we introduced a coarser granularity: We identified the settlements with the nodes of a network and assigned two kinds of weights to the links between them. When the weights are proportional to the number of contacts we observed weakly formed, but spatially based modules resemble to the borders of macro-regions, the highest level of regional administration in the country. If the weights are defined relative to an uncorrelated null model, the next level of administrative regions, counties are reflected.

The complex multi-criteria optimisation problems arising in Kidney Exchange Programmes have received considerable attention both in practice and in the scientific literature. Whereas theoretical advancements are well reviewed and synthesised, this is not the case for practice. We present a synthesis of models and methods applied in present European Kidney Exchange Programmes, which is based on detailed descriptions we created for this purpose. Most descriptions address national programmes, yet we also present findings on emerging cross-national programmes. The synthesis provides a systematic and detailed description of the models and methods the programmes use, revealing important commonalities as well as considerable variation among them. Rather than distilling a single best practice from these results, we find that the variation in models and methods arises because of variation in country characteristics, policies, and ethics. The synthesised state of the art may benefit future national and cross-national initiatives and direct future theoretical contributions within and across the boundaries of the Operations Research discipline.

We consider a situation in which agents have mutual claims on each other, summarized in a liability matrix. Agents’ assets might be insufficient to satisfy their liabilities, leading to defaults. In case of default, bankruptcy rules are used to specify the way agents are going to be rationed. A clearing payment matrix is a payment matrix consistent with the prevailing bankruptcy rules that satisfies limited liability and priority of creditors. Since clearing payment matrices and the corresponding values of equity are not uniquely determined, we provide bounds on the possible levels equity can take. Unlike the existing literature, which studies centralized clearing procedures, we introduce a large class of decentralized clearing processes. We show the convergence of any such process in finitely many iterations to the least clearing payment matrix. When the unit of account is sufficiently small, all decentralized clearing processes lead essentially to the same value of equity as a centralized clearing procedure. As a policy implication, it is not necessary to collect and process all the sensitive data of all the agents simultaneously and run a centralized clearing procedure. This paper was accepted by Yinyu Ye, optimization.

A bstract . The spatial distribution of economic activity is determined by a balancing of increasing and decreasing returns to scale activities. The Henry George Theorem states roughly that, if economic activity is efficiently organized over a “large” space, aggregate land rents equal the aggregate losses from the decreasing returns to scale activities. Kanemoto, Ohkawara, and Suzuki have tentatively applied the Henry George Theorem to investigate whether Tokyo has too large a population. This paper has two aims. The first is to explore the Theorem and its generality; the second is to examine whether it provides a promising conceptual foundation for estimating whether particular cities are over‐ or underpopulated.

Abstract This article investigates the competitiveness of agri‐food exports of the European Union ( EU ‐27) countries on global markets, using the revealed comparative advantage ( B ) index over the years 2000–11. Panel unit root tests, mobility index and the Kaplan‐Meier survival rates of the B index are used. The majority of agri‐food products in the EU ‐27 countries show a comparative disadvantage on global markets. The B indices of the EU ‐27 countries tend to convergence. Most of the old EU ‐15 Member States experienced a greater number of agri‐food products having a longer duration of revealed comparative advantages than have most of the new EU ‐12 Member States. Among the most successful Member States in agri‐food export competitiveness on global markets are the N etherlands, F rance and S pain.

We build a model of administrative barriers to trade to understand how they affect trade volumes, shipping decisions and welfare. Because administrative costs are incurred with every shipment, exporters have to decide how to break up total trade into individual shipments. Consumers value frequent shipments, because they enable them to consume close to their preferred dates. Hence per-shipment costs create a welfare loss. We derive a gravity equation in our model and show that administrative costs can be expressed as bilateral ad-valorem trade costs. We estimate the ad-valorem equivalent in Spanish shipment-level export data and find it to be large. A 50% reduction in per-shipment costs is equivalent to a 9 percentage point reduction in tariffs. Our model and estimates help explain why policy makers emphasize trade facilitation and why trade within customs unions is larger than trade within free trade areas.

Using detailed U.S. and Spanish export data, we document that trade costs of a per-shipment nature are associated with less frequent and larger shipments (i.e., more lumpiness) in international trade. This finding is pervasive across broad product categories, but most apparent for industrial supplies, parts and accessories, and food products.

Drawing on interviews with ten Hungarian digital automotive technology providers, this paper investigates how digital transformation can assist factory economy digital entrepreneurs in their integration in the highly concentrated automotive global value chains (GVCs). We identified four mechanisms by which digital transformation can, in principle, produce opportunities for factory economies in progressing towards economy actors’ entrepreneurial integration in automotive GVCs, as follows. (1) New entrepreneurial opportunities in the digital realm; (2) Fine-slicing innovation and globalisation of R&D; (3) Ecosystem-type innovation collaboration; (4) Interaction-intensity of custom-tailored digital services provision. However, to realise the potential of these opportunities, a critical mass of capable digital entrepreneurs needs to be achieved: a long way to go for factory economies.

Purpose – A good supply chain relationship quality (RQ) is a crucial precursor for any stable exchange relationship which ensures relationship continuity. Although empirical research suggests that strengthening RQ improves supply chain performance (SCP), most studies have focused on dyadic business relationships. To fully understand the relational behaviour of a firm embedded in a supply chain, we need to look beyond the dyad into triads. The purpose of this paper is to investigate how SCP is influenced by RQ in a triadic agribusiness supply chain. Design/methodology/approach – Evidence is drawn from a quantitative survey of 150 agribusiness firms in the maize supply chain in Uganda. Data were collected in triadic context from 50 direct supply chains each composing of a supplier, focal firm and customer. Multi-group structural equations modelling (SEM) was used to assess the differences in perception on the influence of RQ on SCP amongst the supply chain members. Findings – Results provides empirical support for the positive influence of RQ on SCP. SEM reveals differences in perception between the upstream and downstream and amongst the supply chains members. While focal firms considered conflict, coercive power, commitment and trust to be important; suppliers considered trust, dependency and non-coercive power; and customers considered trust, dependency and coercive power to be important RQ factors affecting SCP. Practical implications – For agribusiness managers to enhance business performance there is need to cultivate strong and mutual relationship with supply chain members. It is also important to know how to handle conflicts and use of power so as to realise the benefits of supply chain relationships. Originality/value – The paper is novel in that it assesses SCP in a triadic context in an agribusiness sector from a developing country context. The authors used novel approaches including analysis of a triad, and multiple groups SEM to assess perceptions of each supply chain member’s.

Extant research on the gender pay gap suggests that men and women who do the same work for the same employer receive similar pay, so that processes sorting people into jobs are thought to account for the vast majority of the pay gap. Data that can identify women and men who do the same work for the same employer are rare, and research informing this crucial aspect of gender differences in pay is several decades old and from a limited number of countries. Here, using recent linked employer-employee data from 15 countries, we show that the processes sorting people into different jobs account for substantially less of the gender pay differences than was previously believed and that within-job pay differences remain consequential.