Foreign Direct Investments and Relocations in Business Services – What are the Locational Factors? The Case of Hungary

Hungary became host to various business services through relocations of these activities from other, higher cost locations, especially from Western Europe and through opening up new capacities. Locational advantages determine which countries are chosen as hosts to new or relocated service centres. For the case of Hungary, the analysis is carried out on the basis of eight detailed company case studies (this number is expected to increase to ten). The majority of these is vertical FDI (close to 100 % of export/sales ratio), and two companies represent a confluential case of vertical and horizontal (domestic market oriented) FDI, where sales to the domestic market are also important, though not dominating. The paper’s main aim is to make an attempt at contributing to filling some gaps in the literature, in terms of analysing locational advantages for vertical FDI in services, specifically in business services. It shows that locational advantages, taken into consideration by vertical and horizontal FDI differ from each other to a great extent. It identifies the various elements of locational advantages connected to the different elements of investment motives, in terms of cost reduction, reducing costs of disintegration of production, reducing other costs, and motives arising from the confluence of vertical and horizontal FDI, and the paper relates these elements to the specificities of the business services sector.Offshore outsourcing, Business services, Locational advantages, Hungary, East Central Europe.

Financing rural innovation with community development venture capital: models, options and obstacles

Growing local companies is essential to the economic prosperity for many rural regions and residents. Rural economies, however, rarely attract traditional venture capital. Given the important role that patient capital plays in entrepreneurial development, the future economic vitality of rural communities rests, at least in part, on their ability to access such capital. Community development venture capital (CDVC) is a particularly adept model for overcoming the structural obstacles that rural geographies present for venture capital investors. Rubin explores some of the obstacles this model faces, along with options for sources of funding.Community development ; Venture capital

Case study evidence of the extent and nature of foreign subsidiaries' R&D and innovation capability in Hungary

Multinational companies increasingly locate their R&D activities outside their home countries, thus being one of the main contributors to the ongoing process of the internationalisation of R&D. The internationalisation of corporate R&D is gaining momentum and the New Member States of the European Union, including Hungary are increasingly taking part in that process. The present paper analyses three aspects of this topic, first, the characteristics of R&D activities carried out by foreign affiliates in Hungary. Second, what are those locational factors which attract these types of investments to Hungary, distinguishing between production-related and knowledge-seeking R&D and relating locational factors in Hungary to those in the home country. And third, we analyse what the impact of this type of investments on the local economy is, where we also distinguish between production-related and “stand-alone”, knowledge-seeking projects. In the analysis, company case studies were used based on questionnaire-led semi-structured interviews with leading managers of 20 foreign-owned automotive and electronics companies

Identification of small RNAs abundant in Burkholderia cenocepacia biofilms reveal putative regulators with a potential role in carbon and iron metabolism

Small RNAs play a regulatory role in many central metabolic processes of bacteria, as well as in developmental processes such as biofilm formation. Small RNAs of Burkholderia cenocepacia, an opportunistic pathogenic beta-proteobacterium, are to date not well characterised. To address that, we performed genome-wide transcriptome structure analysis of biofilm grown B. cenocepacia J2315. 41 unannotated short transcripts were identified in intergenic regions of the B. cenocepacia genome. 15 of these short transcripts, highly abundant in biofilms, widely conserved in Burkholderia sp. and without known function, were selected for in-depth analysis. Expression profiling showed that most of these sRNAs are more abundant in biofilms than in planktonic cultures. Many are also highly abundant in cells grown in minimal media, suggesting they are involved in adaptation to nutrient limitation and growth arrest. Their computationally predicted targets include a high proportion of genes involved in carbon metabolism. Expression and target genes of one sRNA suggest a potential role in regulating iron homoeostasis. The strategy used for this study to detect sRNAs expressed in B. cenocepacia biofilms has successfully identified sRNAs with a regulatory function

The Strategic Use of Ambiguity

Ambiguity can be used as a strategic device in some situations. To demonstrate this, we propose and study a framework for normal form games where players can use Knightian uncertainty strategically. In such Ellsberg games, players may use Ellsberg urns in addition to the standard objective mixed strategies. We assume that players are ambiguity-averse in the sense of Gilboa and Schmeidler. While classical Nash equilibria remain equilibria in the new game, there arise new Ellsberg equilibria that can be quite different from Nash equilibria. A negotiation game with three players illustrates this finding. Another class of examples shows the use of ambiguity in mediation. We also highlight some conceptually interesting properties of Ellsberg equilibria in two person games with conflicting interests.