On 28-29th of August the 54th annual ERSA Congress was held in Cork, and our team member Márta Bisztray was among those who had a chance to present their research. ERSA (European Regional Science Association) is an international group, connecting different kinds of regional sciences. In addition to their annual conferences, they also organize summer schools and hand out awards for prominent scientists. This year, Márti presented two of her papers. One of them was about the role of corporate relationships in firms’ FDI decisions. This presentation, titled ‘Do friends follow each other?’, can be found here. The other sought to answer how a plant’s closure affects smaller firms operating in the plant’s proximity. The presentation can be viewed here.
The 30th EALE conference was held on 13-15th of September, with Balázs Reizer, our team member, among its participants. At the conference, new labour-related papers were discussed. Balázs’s paper (co-authored with Rita Pető) examined the reasons why women get less skill-intensive jobs than men at their workplace. The presentation can be found here.
The annual conference of ETSG is now the largest trade-centred conference in the world. Each year a different city provides home for the conference and hence, the field’s prominent researchers to present their current work. This year in Warsaw, as in previous years, our team member Márta Bisztray also attended. She talked about the role that corporate relationship may have in firms’ FDI decisions. The presentation – titled ‘Do Friends Follow Eachother’ – can be found here.
With the upcoming Horizon 2020 initiative, we will have the chance to participate in a research group called MICROPOD. Within the confines of this project, our goal will be to investigate the reasons for the productivity slowdown observable in developed countries in the recent period. The team – with the collaboration of some highly esteemed researcher centers from all over Europe (e.g. Bocconi University, Halle Institute, Paris School of Economics, University College London) – will set out to evaluate if productivity is measured correctly and if its underlying mechanisms are sufficiently well understood. We will also study the effect of globalization and technological change on new production methods, and whether the current policy environment is conducive to the new productivity environment. Our team’s main responsibility will be to utilise the outstanding quality of Hungarian linked micro-data for a more refined understanding of productivity growth. The research will begin in January 2019.
We are happy to announce that our team’s 5-year-long research activity and its final report was deemed ‘excellent’ by the Hungarian Academy of Science and the Council of Research Insitutes’ joint committee.
Consequently, our team was granted a permanent position in the Academy’s Institute of Economics. More about our project here.
The paper Why do firms default on their foreign currency loans? The case of Hungary by Dzsamila Vonnák is about to be published in the Journal of International Money and Finance.
The paper isolates the effect of the choice of foreign currency on the loan performance of firms borrowing in different currencies in crisis times. The author uses a novel micro-level dataset from Hungary to decompose the factors contributing to the worse loan performance of foreign currency borrowers compared to local currency debtors. She finds that foreign currency denomination can worsen loan performance considerably, while selection also contributes significantly to the default differences. On the one hand, per se less creditworthy firms borrowed in foreign currency and during the crisis the foreign currency shocks further weakened their loan performances. On the other hand, more creditworthy firms that were also well-prepared for the currency risks also borrowed in foreign currency. My results suggest that not the institution of foreign currency lending per se that should be blamed for the bad loan performance of foreign currency borrowers, instead one should consider the characteristics of the borrowers.
On the 3rd and 4th May 2018, the Twenty-Third Annual Meeting of the Society of Labor Economists (SOLE) was held in Toronto, Canada, in which Balázs Reizer from our research group also participated.
The Society’s goal is to promote the study of labor economics and to make more significant the contribution of labor economics and labor economists. SOLE holds one general meeting per year, attended by members, at which members’ papers will be presented and discussed.
At this year’s Annual Meeting, Balázs gave a presentation on his research into the relationship of flexible wages, employment and efficiency.
The presentation slides can be downloaded from here.
A column from Gábor Békés and Balázs Muraközy has been published on VoxEU.org. This article is the outline of the researchers’ recent paper The ladder of internationalization modes: Evidence from European firms, forthcoming in Review of World Economics.
Globalisation has provided firms with many ways to serve their foreign customers and this column suggests that the set of internationalisation modes can be described as a ladder, with the higher rungs associated with higher levels of productivity and innovation. This ladder has three main steps – indirect exports, direct exports and outsourcing, and service and manufacturing foreign direct investment – and may provide an important source of flexibility for managers to adapt to policy shocks.
The new Country Reports of the European Commission for 2018 has been released in the last week. In the report about Hungary, one of the boxes is based on the draft report of Balázs Muraközy, Márta Bisztray and Balázs Reizer named “Productivity differences in Hungary and Mechanisms of TFP-growth Slowdown”.
In the box, the effects of interfirm productivity differences and the duality of the economy on the slow aggregate productivity growth in Hungary over the last decade is explained. According to Muraközy et al., large and persistent within-industry productivity differences can explain low aggregate productivity growth via two channels. First, this pattern may imply that low-productivity firms are not upgrading their technology to catch up with their more productive peers. This is certainly a possibility in Hungary, where the share of innovative SMEs is one of the lowest in the EU (see section 3.5). Second, persistent differences may also imply that the economic environment does not facilitate the reallocation of resources to more efficient firms.
Therefore, based on the paper, the importance of within-industry productivity heterogeneity suggests that policies supporting productivity growth and reallocation within sectors can be more effective than policies aiming at inter-industry reallocation.
The European Commission’s Country Reports for 2018 are available here.