The Ranking of Cities as Centres of the Hungarian Economy, 1992-2012

Abstract

This analysis has relied on an empirical method to identify and rank cities as centres of the Hungarian economy from 1992 to 2012. After the change in the political and economic system of Hungary, a new economic climate emerged (e.g. Hungary joined the European Union, foreign direct investments appeared in the economy, special taxation regulations were introduced), which changed the position of cities. During this two-decade-long transformation, the dominance of the capital, Budapest, and its agglomeration considerably increased; the east-west dichotomy became more pronounced, while the economic role of the traditional industrial centres and that of some large cities weakened. Because of these processes, new types of economic centres emerged, which did not have a significant role in the national economy. Cities that became crucial economic actors because of the offshore operation of foreign multinational corporations are exceptional in this. The ultimate goal of this study is to introduce a straightforward urban hierarchy, establish a classification based on the economic profile of cities, and address the typical anomalies after the change in the political system.

Keywords: urban hierarchy, industry profile, transformation, economic power, Hungary