Can they get out of the middle-income technology trap? State strategies in Hungary and Türkiye in promoting automotive investments
Hungary and Türkiye show similar characteristics in many respects. At the same time, many differences can be discovered due to the domestic characteristics of the automotive industry, which explain the different alternatives of the state support mechanism. They have in common that the same pattern of economic policy results in the development of a unilateral support policy in both countries.
The aim of this paper is to review state incentive systems for automotive investments using government and independent sources as well as related literatures. It also examines, based on literature review, the extent to which public incentives promote upgrading in the sector. Finally, it analyses the similarities in the political economic background of the subsidies.
In the case of both countries, we can witness the support of exclusive development coalitions, which points in the opposite direction to the catch-up process. It enables a rent-seeking attitude, not only in an economic but also in a political sense.
Automotive sector, industrial policy, multinational corporations, Hungary, Türkiye.
Cite this paper
Szigetvári, T, & Túry, G. (2023). Can they get out of the middle-income technology trap? State strategies in Hungary and Türkiye in promoting automotive investments. In: 23rd International Joint Conference Central and Eastern Europe in the Changing Business Environment: Proceedings. Vydavateľstvo EKONÓM, Bratislava. pp. 263-277. https://doi.org/10.18267/pr.2023.kre.2490.21