Argument for rural industrialization? Local business tax revenues in the Hungarian urban settlements

Abstract

This article examines the economic inequalities within the Hungarian urban network
in the mirror of the local business tax (LBT) revenues between 2008 and 2022. Its main
goals are to reveal the dynamics of per capita LBT revenues and their relative standard
deviations, and to compare them with the urban hierarchy and the spatial structure of
the industry reflected in county-level gross value added data. According to the results,
as expected, both the urban hierarchy and the emphasized presence of manufacturing
show connections with LBT revenues. The growing and less differentiated per capita LBT
revenues upwards in the urban hierarchy mirror both the location advantages related to
the settlement size and the heritage of the urban network development policy carried out
in the socialist era. In this way, these results also demonstrate the conservative character of the settlement network featured by path-dependent development trends. The close
connection between LBT revenues and manufacturing profile outside the agglomeration
of the capital city refers to the key role of industrial production networks in shaping economic space. The spectacular differentiation of the small towns offers us an argument for
the further research of this settlement group. Although the locations of the manufacturing
sector seem to flourish compared to other urban settlements, there is also a great conceptual question in the context of the economic development effects of industrialization:
does it mean the catching up with the core regions or the peripheralization of the manufacturing sector, the spatial reproduction of backwardness? To answer this question and
complete the argumentation mentioned in the title, the in-depth research of production
network integration is needed