Voting for staying. Why didn't the foreign-owned automotive component suppliers relocate their activity from Hungary to lower-wage countries as a response to the economic crisis?. Issue 1 (2nd January 2016)

• Record Type: Journal Article
• Authors: Rugraff, Eric; Sass, Magdolna
• Is Part Of: Post-communist economies. Volume 28:Issue 1(2016)
• Page Start: 16
• Page End: 33
• Publication Date: 2016-01-02
• Subjects: Relocation -- crisis -- automobile component suppliers -- Hungary; Post-communism -- Economic aspects -- Periodicals; Russia (Federation) -- Economic conditions -- Periodicals; Europe, Eastern -- Economic conditions -- Periodicals; 330.91717
• DOI: 10.1080/14631377.2015.1124552
• Languages: English
• ISSNs: 1463-1377

Abstract

Abstract: On the basis of interviews with 10 foreign-owned automobile component suppliers in Hungary and the collection of indirect information, this article explains why the multinationals did not relocate their activity from Hungary to lower-wage countries as a response to the economic crisis. We suggest that the four 'keep factors of location' – additional investments of the automobile manufacturers, unchanged labour market regulation, changes in government policy and the existence of few alternative sites of relocation – were more dominant than the two main 'push factors of relocation' – relatively low sunk costs and low dependence on the local environment.