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Could the Irish Miracle be Repeated in Hungary?

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Abstract

It is widely recognized that Foreign Direct Investment (FDI) plays an important role in economic development. However, its impact on entrepreneurial activity has not been well researched. Internalization theory is used to explore how inward FDI impacts entrepreneurial activity. Using data from Global Entrepreneurship Monitor (GEM), we find significant differences in entrepreneurial activity between Ireland and Hungary in both the type of people starting businesses and the opportunities pursued. Economic development policies should focus on increasing human capital, promoting enterprise development, and upgrading the quality of FDI.

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Acknowledgments

László Szerb acknowledges the financial support of the Bolyai János Research Foundation. We thank participants at the GEM Research Conference in Budapest, Hungary, the Workshop on Opportunity Recognition at the Max Planck Institute, Jena, Germany, and the Tinbergen Institute Conference at George Mason University for valuable comments. We would also like to thank, David Storey, Saul Estrin, Dan Preznitz and two anonymous referees for valuable comments.

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Authors and Affiliations

  1. School of Public Policy, George Mason University, Fairfax, VA, 22030, USA

    Zoltan J. Acs

  2. Max Planck Institute of Economics, Jena, Germany

    Zoltan J. Acs & Siri Terjesen

  3. UCD School of Business, University College Dublin, Dublin, 4, Ireland

    Colm O’Gorman

  4. Faculty of Business and Economics, University of Pecs, Pecs, 7601, Hungary

    Laszlo Szerb

  5. Brisbane Graduate School of Business, Queensland University of Technology, 2 George Street, GPO Box 2434, B423, Brisbane, 4001, Australia

    Siri Terjesen

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  1. Zoltan J. Acs
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  2. Colm O’Gorman
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  3. Laszlo Szerb
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  4. Siri Terjesen
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Correspondence to Zoltan J. Acs.

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Acs, Z.J., O’Gorman, C., Szerb, L. et al. Could the Irish Miracle be Repeated in Hungary?. Small Bus Econ 28, 123–142 (2007). https://doi.org/10.1007/s11187-006-9027-9

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