Work

Political Favoritism, Public Funds and Manufacturing Firm Performance in Hungary

Year: 2026

Type: article

Abstract: Using financial report data and local election results, we analyze political favoritism to uncover the political–economic pattern of public subsidies in Hungary between 2010 and 2023. The results indicate that firms’ access to central government funding is positively and robustly affected by the political alignment of the municipal location of its corporate headquarters. The positive effects are particularly strong in selected cities with corresponding political background. The capital city plays a special role in political developments. We also identify a political business cycle, showing that firms face easier access to subsidies prior to parliamentary elections.

Source: Comparative Economic Studies

DOI: 10.1057/s41294-026-00291-7

Authors: Vivien Czeczeli, Jarko Fidrmuc, Gábor Kutasi

Institutions: Ludovika University of Public Service, Zeppelin Universität gemeinnützige GmbH, Mendel University in Brno

Language: English

Topic: Political Influence and Corporate Strategies

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: hybrid

Estimated APC paid: $3,390