Paralel and multilayer economic dualities

Abstract

Dualities in an economy may emerge for various reasons, but the general stereotype of high-tech foreign firms at odds with underdeveloped local ones seems to be an oversimplification of the problem. Building on a sample of more than 4,600 Hungarian firms, this paper investigates the parallel existence of various economic dualities. The novelty of this paper is that it concludes that not only several different dualities can be identified, but also that several layers of duality exist. For example, both locally and foreign owned entities are very deferent in efficiency when grouped on export intensity and wage level. This phenomenon makes one-size-fits-all business support programs obsolete; instead it points to the need for tailor-made development frameworks for the various subgroups of companies to aid in their catching-up to Western economies. The highly differentiated picture of companies detailed in this paper should also help economic decision makers to promote investments that truly decrease the lag between the Central and East European countries and Western countries.