Research
I am an applied economist working on international economics, economic geography and organizations, mostly with large firm-, transaction- and person-level microdata. Also on Google Scholar, IDEAS/RePEc and ORCID.
Publications in refereed journals
Cultural Homophily and Collaboration in Superstar Teams
Abstract
One may reasonably think that cultural homophily, defined as the tendency to associate with others of similar culture, affects collaboration in multinational teams in general but not in superstar teams of professionals at the top of their industry. The analysis of an exhaustive data set on the passes made by professional European football players in the top five men's leagues reveals that on the contrary, cultural homophily is persistent, pervasive, and consequential, even in superstar multinational teams of very-high-skill individuals with clear common objectives and aligned incentives who are involved in interactive tasks that are well defined and not particularly culture intensive.
CEPR DPSummaryData & CodeMS Blog
Media Boston Globe · Der Standard (AT) · Management Research Podcast in german
Favoritism under Multiple Sources of Social Pressure
Abstract
When social pressure leads to favoritism, policies might aim to reduce the bias by affecting its source. This paper shows that multiple sources may be present and telling them apart is important. We build a novel and granular dataset on European football games and revisit the view that supporting crowds make referees help the host team. We find this bias to remain unchanged even in stadiums closed due to Covid-19. Instead, influential host organizations emerge as the source of social pressure. This has an adverse effect on maintaining the ranking of influential teams and hindering the progress of smaller teams.
Media De Correspondent (Dutch)
Into the Unknown: The Extent and Boldness of Firms' International Footprint
Abstract
Firms make footprints as they internationalize. Going beyond simple measures of firms' internationalization, we conceptualize and measure the extent of a firm's international footprint as the number of location-mode combinations it is active in, whereas the boldness of the footprint shows how widespread (across modes and locations) firms' international activities are, compared to other firms with similar extent. Extent describes the complexity of international activities, and boldness captures the risk-taking associated with operating in less know contexts. Consistent with a microfoundations lens on global strategy, we find that boldness correlates with managerial risk-taking attributes, while the extent of internationalization strongly correlates with capabilities conducive to managing more complex operations. These measures offer a highly suitable tool for analyzing the relationship between internationalization and performance.
Media Fakulti video
Machine imports, technology adoption and local spillovers
Abstract
In developing economies import can be the primary source of adopting new technologies and modern production equipment. Using a uniquely compiled Hungarian firm-level dataset, we investigated whether firms' decision to import a specific machine is influenced by the local accumulation of experience in that same imported machine. Our results suggested that an additional local importer in the firm's vicinity increases the probability of importing that particular machine considerably. Distance plays a key mediating role as firms, especially in small cities, learned mostly from neighboring peers. We also found that even within a type of imported machine, the source country of the product matters a great deal. Finally, the extent of spillover effects was found to vary a great deal both with respect to the importing firm as well as the composition of peers. Larger, foreign owned and internationalized firms are the ones that benefit from having importing firms in their vicinity, while small and domestically owned firms could actually be adversely affected by peer effects. Our results could be indicative for policy-makers interested in indirect impact of technology upgrade subsidy programs. We found that such indirect effects do exist. However, they are centered on large to large firm interactions. As smaller sized firms producing for the domestic market do not benefit much from import spillovers, policies aimed at helping such firms may not rely on these indirect effects.
The ladder of internationalization modes: Evidence from European firms
Abstract
How do firms enter international markets? To answer this question, this paper uses a unique multi-country firm-level dataset which, besides direct exporting and FDI, provides explicit information on a number of internationalization modes: indirect exporting, outsourced manufacturing and service FDI. We present a theoretical framework in which modes requiring higher and higher commitment have progressively higher fixed and lower marginal costs. By estimating multinomial and ordered logit models, we present evidence in line with such a sorting framework with respect to TFP and innovativeness. We identify three 'clusters' of modes: indirect exporters are similar to non-exporters, direct exporters and outsourced manufacturers constitute a second cluster while service and manufacturing FDI are the most demanding internationalization modes.
Grid and shake: Spatial aggregation and the robustness of regionally estimated elasticities
Abstract
This paper proposes a simple and transparent method for measuring spatial robustness of regionally estimated coefficients and considers the role of the administrative districts and of the size of regions. The procedure offers a new solution for a practical empirical issue: comparing the variables of interest across spatially aggregated units. It improves upon existing methods, especially when spatial units are heterogeneous. To illustrate the method, we use Hungarian data and compare estimates of agglomeration externalities at various levels of aggregation. Using the procedure, we find that the method of spatial aggregation seems to be of equal importance to the specification of the econometric model.
Shipment frequency of exporters and demand uncertainty: An inventory management approach
Abstract
This paper examines how exporting firms adapt to the uncertainty stemming from demand volatility. By using monthly customs data from France, we decompose exports into different extensive and intensive margins including two novel margins: the number of months the firms exported (frequency) and the average export value per month. We establish four empirical patterns. First, firms export less to markets with higher demand volatility. Second, this effect is mainly explained by the frequency margin. Third, volatility affects the frequency margin through two channels: indirectly through lower trade volume and directly through logistics re-optimization. In particular, our results suggest that firms send less frequent, larger shipments to more uncertain markets conditional on total exports. Fourth, the effect of demand volatility is magnified on markets with longer time-to-ship. We propose that these observations are in line with simple stochastic inventory management approaches.
Measuring productivity premia with many modes of internationalization
Abstract
We show that estimating productivity premia for internationalization modes requires information compression when firms can choose from many modes. Using a unique database of European firms we illustrate the different approaches and suggest that researchers should deliberately choose from them.
Internationalization and Innovation of Firms: Evidence and Policy
Abstract
We use a representative and cross-country comparable sample of manufacturing firms (EFIGE) to document patterns of interaction among firm-level internationalization, innovation and productivity across seven European countries (Austria, France, Germany, Hungary, Italy, Spain, United Kingdom). We find strong evidence of positive association among the three firm-level characteristics across countries and sectors. We also find that the positive correlation between internationalization and innovation survives after controlling for productivity, with some evidence of causality running from the latter to the former. Our analysis suggests that export promotion per se is unlikely to lead to sustainable internationalization because internationalization goes beyond export and because, in the medium to long term, internationalization is likely driven by innovation. We recommend coordination and integration of internationalization and innovation policies 'under one roof' at both the national and EU levels, and propose a bigger coordinating role for EU institutions.
Agglomeration Premium and Trading Activity of Firms
Abstract
While most empirical studies in economic geography document a steady and positive correlation between regional density and firm productivity, the impact is not homogeneous across firms. Importantly, recent international trade literature showed that trading firms are different in terms of workforce, size and productivity. We argue that externalities that determine density premium for firms will be affected by the firms' involvement in trade. Indeed, firms active in international trade may employ a different bundle of resources and be organized differently so that they would appreciate inputs and information in a different fashion and intensity. Using Hungarian manufacturing firm level data from 1992 to 2003 at a 150 micro-region level, we show that the elasticity of agglomeration on productivity is much larger for traders than for non-traders. As firms' trade participation is endogenous to firm performance, we offer various treatment methods of this endogeneity issue. We find that our key results are robust and well above the gap suggested by simple self-selection models.
Temporary Trade and Heterogenous Firms
Abstract
Using Hungarian firm-transaction level export data, we show that about one third of firm–destination and about one half of firm–product–destination export spells are short-lived, or temporary, each year. This is in odds with theories where comparative advantage is stable and market entry costs are sunk. We show how endogenous choice between variable and sunk cost trade technologies can explain the empirical importance and some characteristics of temporary trade. We build a model in which the likelihood of temporary trade depends on productivity and capital cost of the firm as well as well-known gravity variables of destinations. These predictions are borne out by the data; the likelihood of permanent trade, defined by a simple filter, rises with firm productivity, financial stability, proximity and GDP of destination countries.
Discussion papers and work in progress
What Happens in Paris, Does Not Stay in Paris: Trade Fairs and Search and Matching Frictions
Abstract
Search and matching frictions prevent firms from forming international trade linkages. Firms commonly use trade fairs to overcome these frictions. However, despite often being subsidized by export promotion agencies, we lack evidence on how trade fairs facilitate link formation. We exploit a unique feature of Hungarian firms' participation in the 1900 Paris World Exhibition, where a trial exhibition revealed firms' ex-ante export potential category to develop a novel bounding strategy that compares treated firms to control groups from above and below in export potential. To implement our empirical strategy, we collected and digitized a novel dataset detailing firms' exhibition attendance and export status, linking entities across five different datasets. We find that participation increases export probability by 8.5–14pp and employment by 15.4–23pp over eight years. Effects are larger when firms face fewer competitors, highlighting both matching benefits and congestion effects when search and matching frictions are reduced. To carry out this estimation, we build a novel historical panel dataset of Hungarian firms for the 1894 to 1906 period by digitizing and combining over 12,000 firm records from five historical datasets.
Vibe Coding Kills Open Source
Abstract
Generative AI is changing how software is produced. In vibe coding, an AI agent builds software by selecting and assembling open-source software with minimal direct developer reading or engagement. We model equilibrium effects on OSS entry, quality, and maintainer returns, showing that widespread vibe coding can lower user engagement, reduce OSS availability and quality, and decrease welfare unless maintainer compensation mechanisms change.
Media Financial Times · The Register · 404 media · IT Magazine (CH) · PC Gamer · Hackaday · Wikipedia (Vibe coding) · Reddit r/opensource thread · TechTarget · InfoQ · LeadDev
Right-wing terrorism and far-right support: Evidence from anti-Roma attacks in Hungary
Abstract
How do ethnically motivated terrorist attacks shape electoral support for the far right? We study a unique case: a coordinated series of anti-Roma murders in Hungary in 2008–2009, the most severe episode of anti-minority violence in the country since World War II. Combining difference-in-differences and synthetic control methods, we compare attacked settlements to multiple counterfactuals, including planned-but-unrealized targets. We find that Jobbik, Hungary’s radical right party, gained 11–14 percentage points more support in attacked villages than in comparable controls in the 2010 election—an increase 53–70% larger than baseline trends. The effect persisted for several years and spilled over to nearby settlements. In contrast to some research from Western Europe suggesting that right-wing terrorism can reduce far-right appeal, our findings highlight how deep-seated prejudice can reverse this pattern. The results underscore the importance of antecedent inter-group relations in conditioning political reactions to ethnic violence.
Stardust: peer effects in early career development
Abstract
How do workers learn from coworkers when collaboration is essential? We investigate learning mechanisms using European men's football — a setting that overcomes key limitations of linked employer employee administrative data. Unlike these datasets, we observe direct collaboration (passes between players), better estimated and frequently-updated human capital measures (transfer market values) that alleviates wage rigidity, and professional skill evolution. We confirm that 10% higher peer quality associates with 3% higher wage growth. However, we uncover previously hidden mechanisms: First, conditional on average quality, team composition and exposure to stars do not affect learning. Second, better peers reduce individual playing time, causing standard estimates to underestimate learning effects by 30%. Third, intensive collaboration with high-quality peers drives learning—one standard deviation more passes with top colleagues yields 10% higher wage growth. Fourth, peer effects manifest in learnable skills (passing, reactions) but not innate abilities (speed), providing evidence against selection bias. Finally, learning persists after job changes, suggesting genuine human capital accumulation rather than temporary complementarities. Our granular production data reveals that workplace learning depends critically on direct interaction opportunities, not mere proximity to talent.
Integrators and Robot Adoption: Facts from Hungary
Abstract
This paper explores the role of intermediaries in facilitating the adoption of industrial robots. Using firm-to-firm transactions in Hungary, we identify robot integrators and document five new facts. First, most firms adopting robots do so through integrators rather than directly importing them. Second, integrators significantly benefit small and medium-sized firms, which may not have the scale to adopt robots independently. Third, robot integrators tend to be larger, more productive and more capital intensive than other firms in their industries. Fourth, integrators are particularly exposed to foreign import shocks. Fifth, robot adoption though integrators is more lumpy than robot imports.
Connected Choices: Business Group Affiliation and FDI Location Decisions
Abstract
How do multinational business groups leverage collective experience when expanding globally? Using comprehensive FDI and ownership data, we reconstruct business group networks for 5,061 greenfield investments in 14 Central and Eastern European countries and show that prior FDI experience within a business group fundamentally alters location choices by affiliated firms. We find that a prior group investment in a country increases the probability of first-time affiliate entry by 5.4 percentage points—equivalent to a 50% average policy multiplier for investment promotion for investors with no prior local presence. We introduce a measure of organizational distance that combines ownership strength (majority vs. minority stakes) and network proximity (direct vs. indirect links), revealing how regulatory boundaries influence knowledge flows. Surprisingly, even weakly connected affiliates (indirect minority stakes) exhibit significant co-location patterns, revealing that location-specific knowledge flows through business groups despite regulatory barriers to formal coordination. By integrating internal network effects into location-choice theory, we extend international business research on MNE strategies. For policymakers, our findings reveal that FDI subsidies generate substantial within-group spillovers, while for IB theory, we demonstrate how internal networks reshape traditional location choice models.
When dispersed teams are more successful: Theory and evidence from software
Abstract
Who collaborates with whom when physical co-location is no longer a constraint? How does the geographic composition of teams influence project success? We develop a model of global team formation and collaboration in which individuals have heterogeneous and partially observable skills, collaboration incurs geographic frictions, and project success depends on the best idea developed in the team. The model yields five testable predictions: (I) collaboration is more likely among geographically proximate individuals; (II) only highly skilled individuals form long-distance collaborations due to selection effects; (III) geographically diverse teams produce higher-quality outcomes; (IV) the positive impact of diversity on success is stronger for more complex projects; and (V) there is a non-linear relationship between team size and project quality. We test these predictions using a highly granular dataset on open-source software development, where project success is measured through downstream usage. The open-source setting offers a unique empirical advantage: its transparency and absence of physical constraints allow us to isolate the role of team composition and collaboration frictions. Our findings confirm the model's predictions and suggest that the benefits of dispersed collaboration extend beyond software development to other knowledge-intensive activities.
Supplier-buyer relationships in global value chains
Publications beyond economics
Books and book chapters
- Measuring competitiveness in Europe: resource allocation, granularity and trade (editor, with Carlo Altomonte), Bruegel, Brussels, January 2016
- Measuring competitiveness in a granular and global world (with Carlo Altomonte), in Altomonte and Békés (2016), pp. 3–13
- Micro-founded measurement of regional competitiveness in Europe (with Gianmarco I.P. Ottaviano), in Altomonte and Békés (2016), pp. 26–46
- Barriers to data access and matching in Europe (with Zsuzsa Holler), in Castellani and Koch, Mapping competitiveness with European data, Bruegel Blueprint 23, 2015
- Still standing: how European firms weathered the crisis (with M. Koren, B. Muraközy, L. Halpern), Bruegel Blueprint 15, December 2011
- Motives of corporate location choice, chapter 2.1 in The Hungarian labour market 2004, ed. K. Fazekas, J. Koltay and Zs. Cseres-Gergely, MTA KTI, 2004
Resting projects
- Gender differences in entrepreneurial choices (with Anna May and Anikó Hannák)
- Auto suppliers (with Balázs Muraközy)
- Floods, amenities and house prices (with Áron Horváth and Zoltán Sápi), MTA KTI Discussion Paper, 2016
- Trade complexity and productivity (with Carlo Altomonte), CeFiG Working Paper 12, October 2010
- Location of manufacturing FDI in Hungary: how important are inter-company relationships? Magyar Nemzeti Bank Working Paper 2005/7 — new version available on request
Non-technical posts
- Technology adoption via machine imports: identifying who learns from peers (with Péter Harasztosi), VoxEU column, 30 September 2019
- The ladder of internationalization modes (with Balázs Muraközy), VoxEU column, 28 March 2018
- The knowns and unknowns of the European competitiveness debate (with Carlo Altomonte), Roubini EconoMonitor, 27 April 2016
- Internationalisation and innovation of firms: give them one roof (with Altomonte, Aquilante and Ottaviano), VoxEU column, 21 March 2014
- Restarting growth — why institutions matter for Hungarian companies, Portfolio.hu, 19 October 2012
- Temporary trade: exporting only once in a while (with Balázs Muraközy), VoxEU column, 20 September 2012
- Still standing: global crisis and European firms (with Koren, Halpern, Muraközy), VoxEU column, 18 May 2012
- Trading ain’t easy: how complex is it to trade goods? (with Carlo Altomonte), VoxEU column, 19 November 2010
- Trade collapse during the 2009 crisis: how did European companies fare? Seminar presentation, DG Trade, European Commission, Budapest, 2011
- Financial crisis: from global to local, Budapest Times, 13 October 2008
Policy reports
- Hungary — how did exporting firms cope with the crisis? EFIGE Country Report: Hungary, February 2011 (with Miklós Koren, László Halpern and Balázs Muraközy)
- Internationalisation of corporate activity and competitiveness of the European economy: some policy implications (with Carlo Altomonte), Micro-Dyn WP 6/2011
- Agglomeration premium and trading activity of firms — a discussion (with Péter Harasztosi), 3rd Micro-Dyn Newsletter, September 2010
- Hungary and the euro: waiting for Godot, in Economic and political challenges of acceding to the euro area in the post-Lehman Brothers’ world, Open Society Institute Sofia / European Policies Initiative, October 2009
In Hungarian (Magyarul)
Folyóiratcikkek
- Területi egyensúly: a munkaerőpiac és az ingatlanárak kapcsolata Magyarországon (Bisztray Mártával), Szigma, LI (2020) 3, 185–214
- Beszállítói termékek a magyar feldolgozóiparban (Muraközy Balázzsal), Közgazdasági Szemle, LXIII, 2016. október, 1046–1073
- Lakóingatlanárak és települési különbségek (Horváth Áronnal és Sápi Zoltánnal), Közgazdasági Szemle, 63 (12), 2016, 1289–1323
- Külkereskedelem és a vállalatok közötti különbségek (Muraközy Balázzsal és Halpern Lászlóval), Közgazdasági Szemle, 2013. január
- Magyar gazellák: a gyors növekedésű vállalatok jellemzői és kialakulásuk elemzése (Muraközy Balázzsal), Közgazdasági Szemle, LIX, 2012. március, 233–262
- A teremtő rombolás szerepe a vállalati termelékenység alakulásában Magyarországon (Halpern Lászlóval és Muraközy Balázzsal), Közgazdasági Szemle, 63 (2), 2011. február
- Optimális valutaövezetek, gazdasági integráltság és hasonlatosság: az Európai Unió példája, Közgazdasági Szemle, 45 (7–8), 1998, 709
Könyvfejezetek
- Nemzeti innovációs rendszer, in Pörzse G. (szerk.): Kutatásszervezés és innovációmenedzsment az egészség- és élettudományok területén, Semmelweis Kiadó, 2011
- Innovációs klaszterek és tudásparkok, in Pörzse G. (szerk.): Innovációmenedzsment, Semmelweis Kiadó, 2008