A MAGAS SZINTŰ ÜZLETI SZOLGÁLTATÓK LOKÁCIÓS STRATÉGIÁINAK HATÁSA KÖZÉP-EURÓPA METROPOLISZAINAK GAZDASÁGI POZÍCIÓIRA THE IMPACT OF LOCATIONAL STRATEGIES OF ADVANCED PRODUCER SERVICE FIRMS ON THE METROPOLE CITIES’ ECONOMIC POSITIONS IN CENTRAL EUROPE

The paper focuses on the interrelatedness of the location strategies of the advanced producer services and the urban hierarchies in the Central European countries based on the 36 metropole cities of the region (9 countries), and focuses on how far the Central European metropolises are integrated into the international networks of the advanced producer service firms (APS firms). Along with the globalization process a transnational urban network is developing in the last few decades, the international flows of networks, information, labour and capital are getting more intense, and the global service sector tends to locate offices where a critical mass of highly skilled labour force and economic performance is present with high level physical and digital accessibility. This strategy favours the capital cities and metropole cities which are in the focus of my study. Which metropole cities can be more attractive for APSs and what are the underlying factors is the main question of my paper. The first part of the paper focuses on the location strategy of APS firms based on three aspects: the service value of a city that identifies the size of the nodal point in the network; the quantity of flows measured by the number of interactions among city-pairs among offices of a certain APS, and the measurement of network relations pointing out the ratio of all APS business interactions in the macro region appearing in a city. A complex APS location index is developed that sets up a hierarchy among the metropole cities of the sample. The second part of the paper searches for justification on the hierarchy set up, and on the underlying factors by analyzing several aspects influencing the position of a city. These aspects include the economic power of the city, the role of the city in business decisions measured by locations of production type of multinational companies, the role of the city in the administrative structure, the accessibility of the city, and other social factors, like knowledge. The paper offers answer on how the location strategies of APS firms affect the position of the metropole cities in the region, whether new division lines or peripheries occur in the macro-region.


INTRODUCTION
The paper focuses on the relative hierarchy of the metropolises of Central Europe based on the integration level to the world economy, indicated by the location strategies of advanced producer service companies (APS companies). Today, metropolises are the main centres of economic development; the main resources, information, capital and highly qualified labour are concentrated there, and flow through them (Friedmann 1995, European Commission, 2017. Metropolises -depending on their geographical location -fulfill different functions like that of a gateway city, global or macro-regional institutional and control hubs, nodes of different world-wide networks.
Actors of international economic relations can be examined based on their relations to globalization. The international flow of factors and the activities of multinational companies are the main determinants of the world economy. As a consequence of globalization, new markets emerge, global markets of banking, financial, insurance and logistical services develop, new actors appear, and multinational companies integrate their manufacturing and servicing activities world wide, manage and control global production.
In the 1990s, the process of economic globalization accelerated, barriers of international trade were largely liberalized, the development of info-communication technology enabled the real time transmission of information, financial markets have been globalized, thus enabling international transactions, and the global restructuring of international division of labour (Simai-Gál, 2000, Szentes, 2002. All these factors contributed to the restructuring of the economic system. Besides national economies and governments, multinational companies (MNCs) gained power, extended their geographical scope. The growing complexity of their activities and geographical presence incited advanced producer services to develop as a separate sector, organized as multinational companies, and offering their services to the manufacturing MNCs.
The most important characteristic of globalization in world economy at the end of the 20th century is the primary role of high added value products, top technological solutions and services (Csáki, 2011). The economic distances could diminish by the reduction of transport and communication costs, the development of info-communication network and the development of mobile communication. The financial processes could become global based on these developments, as well, which was a prerequisite to the globalization of the world economy. It should be highlighted that both international capital mobility and international technology transfer works through multinational companies.
Economic globalization offered good positions mainly to cities and primarily to large cities as power centres of world economy (Sideri, 2007). The relation between urbanization and the development level of a national economy is linear, urbanization contributes to the growth of productivity that strengthens the significance of urban areas (Laakso-Kostiainen, 2007). The economic performance of the national economies mainly depends on the performance of urban areas, which concentrate innovation capacity, technology and workplaces (European Commission, 2017). Metropolises strengthened the most, their significance goes beyond national economy, and as seats of the actors of the world economy, that is, as seats of multinational companies, their economic power exceeds other cities' opportunities.
The paper examines the metropolises of Central Europe, namely, the relative hierarchical relations among them. Metropolises are understood according to Eurostat definition in the paper (cities with a population above 100,000 inhabitants are considered metropolises by Eurostat). The central indicator of empirical analyses is the location strategies of APS firms.
Although the presence of APS companies already indicates the integration capability of the cities, the level of integration depends on the concentration of APS companies. The larger the concentration of APS companies is, the more important nodal role is fulfiled by the city in the world economy. The paper examines further factors besides APS location as control factors that influence the power centre role of metropolises in the world economy and that are important in the location decisions of advanced producer service firms. These factors are: the location strategies of producer multinational companies as main clients of APS companies, the main location factors for APS offices, like economic performance, number of population, presence of highly qualified labour, accessibility of the city, volume of production. The administrative role could be an important additional factor, but, as all metropolises are regional, or at least medium level centers of public administration, which means significance in the national urban hierarchies per se, this factor does not influence the relative hierarchy of metropolises, and thus, it is not included. However, it should be stated that it represents also a locational aspect of APS companies.
The paper focuses on nine countries: Austria, Hungary, Slovakia, Czech Republic, Poland, Romania, Bulgaria, Slovenia and Croatia, and refers to them as Central Europe in the paper.
The objectives of the paper:  Examination of the position of Central European metropolises in APS company networks, and thus, evaluation of their capacity for integration into world economy;  Analyses of further factors and their relations influencing the Central European metropolises' positions as nodal points in urban hierarchy and APS location: metropolises as seats of manufacturing multinational companies, economic performance and number of population, accessibility, ratio of qualified labour, volume of production;  Identification of relative hierarchy of metropolises in Central Europe based on their capacity of integration to world economy.

OBJECTIVES AND METHODS
The position of metropolises strengthened related to the new forms of international division of labour. While production is characterized by deconcentration, location of advanced producer services including financial services are characterized by concentration, which also induces changes in the urban hierarchies.
The power division between national economies and metropolises (world cities, Friedmann, 1986, global cities, Sassen, 1991, global city-regions, Scott, 2001, cities in globalization, Taylor et al., 2004) is also reorganized, economic decision-making and control functions densify in metropolises as a consequence of the presence of multinational companies, especially seats of MNCs. These cities possess functions such as production and service centres, nodes of financial transactions and information, offering metropolises a relatively stronger economic significance as compared to nation states (Taylor, 2012).
Metropolises are nodal points of diverse networks, besides their economic role, they act as political, cultural, international organizational, etc. centres, and each function results in a different global network. However, the functioning mechanism within the different networks is similar. The power of metropolises equals the accumulation of the different global networks that connects the city to the global processes (Laakso, Kostiainen, 2007). Metropolises are also important actors on national and regional levels in their countries as a result of their agglomeration capacity. Relatedly they are significant actors in the field of services, regarding both business and public services, and as public administration centres.
Urban hierarchies can be empirically examined either based on infrastructural networks (transport routes, rail network, international airport traffic, info-communication network) or based on the new agents of global economy, that is the multinational company seats and offices (Felméry, 2014). According to the infrastructural approach, the connectedness ensured by the physical infrastructure is the prerequisite for the development of transnational urban networks. According to the other approach, that is, placing MNCs to the focus of examination, the networking relations among the cities depend on the interactions and relations of the multinational seats, offices and venues in the different cities. This approach places the multinational companies' location strategies in the centre of empirical research (Taylor, 2001, Alderson and Beckfield, 2004, Hymer, 1972, Cohen, 1981, Friedmann, 1986and Sassen, 1991. The mentioned urban hierarchy theories based on a functional approach appeared since the 1980s and 1990s, before categorization based on the number of population was widespread in the literature. It was Beaverstock et al. (1999), Sassen (1991Sassen ( , 2001, Taylor (2001) who referred to advanced producer services (accountancy, management, legal, advertising and financial services) as functions capable for identifying outstanding economic centres in the world economy.

Metropolises in Central Europe
Central European urban structure differs from that of the Western part of the continent, a sparser urban structure with a few development islands characterizes it (Hardy, 2011). There are smaller countries in size, and relatedly, metropolises with smaller number of population in Central Europe, and medium-sized cities in a Western European meaning are lacking (cities with a population above 500,000) with the exception of Poland. The examination area has a peripheral geographical location, which is also indicated by the GDP level, however, capital cities and other metropolises emerge from their regions economically, as well. Large differences are to be experienced in the economic performance level of the metropolises, and show a relatively lower performance as compared to their Western European counterparts apart from the capitals and some Polish metropolises. This is due to their Central European location. There are 53 metropolises in the macro-region, but only 36 of them, including nine capital cities, appear as APS company location, however, there are further 34 nonmetropolitan APS locations (Döbrönte, 2016(Döbrönte, , 2018. Thus, the statement is disproved that the metropolis status of a city positions it to a higher level of the urban hierarchy per se in the macro region as regards integration to world economy. The spread of advanced producer services in the macro-region As related to economic globalization, the number and complexity of business transactions have multiplied thus increasing the complexity and volume of central functions of manufacturing multinational companies. As a consequence to this process, the expansion of advanced producer services took place. Another important impact of globalization is that service intensity of industrial production grew, and multiplied the demand for business services (Johnson, 1998). In the 1990s the main motivations were the access to new markets, taking advantage of market gaps, taking the benefit of first comers and offering business services. The higher share in volume horizontal investments that is whole scale service providers possess, the higher potential the macro-region in integration to world economic processes has. Horizontal investments are regarded by the literature (Laakso, Kostiainen, 2007) as demand led investments, in which case a parent company offers the same scale of services on the new market as at its seat and other venues, as the aim is to cover a new market segment.
The location strategies of advanced producer service firms are examined empirically based on the presence of 64 advanced producer service companies placing 36 metropolises out of the 53 in the macro-region to the sample. The objective of the study is not the identification of the global significance of the metropolises, but the analysis of their Central European position, investigating that on what level they are able to join the network of advanced producer service firms. The presence of an APS company already indicates the presence of globalization in the city, and its connection to international economic networks (Csomós, 2011). The starting point of the methodology is offered by Taylor (2001)

MNC seat concentration
The spread of multinational companies was motivated by the optimization of international division of labour, making advantage of lower wage costs in certain countries, proximity to resources and markets. These factors had an impact on the present geographical spread of multinational companies. The FDI capital arriving to the macro-region in the 1990s aimed at utilising these advantages. In order to minimize costs and cap profit, multinational companies disintegrated their product chain, and deployed different segments to different countries (Wall et al., 2011). Multinational companies are able to bridge informal trade barriers within their networks, and enable organization of border crossing economic activities in different geographical destinations that offers them independent power centre status. Dunning (1993) mentioned four factors as regards international expansion: market acquisition, increase of efficiency, proximity to resources and strategic asset management, investment. Central Europe is a favourable destination for FDI since the beginning of the 1990s.  (Deloitte, 2015). The outstanding position of the capitals as seats of manufacturing multinational companies is obvious; the high value is also justified by the sample being the top 500 MNCs of the region. Polish metropolises with a population above 500,000 have 5-11 seats, and six metropolises have no seat from the top 500.    The cities in the sample are the strongest urban areas of Central Europe in economic terms, however, there are huge differences between their economic performance, and their economic development potential is also rather differing. The maco-region is an economically less developed area, their economic performance can be explained by several factors.
The value of the coefficient of determination in a regression analysis is around 70% (R 2 = 0.7048 for the GDP, and R 2 = 0.698 for the GVA), which is a relatively high value, however, it indicates that besides the GDP and the GVA values, further factors are also determinant in APS locational decisions.

Further locational factors
Besides economic performance, population concentration, accessibility and concentration of

Figure 4 Characteristics of metropolises
Source: own editing based on Eurostat data The graph shows the own impact of each factor. Regarding population concentration, only the category of above 500,000, and the category between 100,000 -500,000 is used, and only four Polish non-capital metropolises have a higher number of population than 500,000. The Central European metropolises are less outstanding in the volume of functional centrality due to the average number of population than the Western European ones. The qualification index suggests the outstanding importance of the capitals with a value over 70 per cent with the exception of Zagreb. Further Polish and Austrian metropolises have a value between 40 and 60 per cent as an average, and Varna a value above 50 per cent. There is a trade-off between the qualification index and the index of employment in industry, the latter being high in the Czech, Polish and Romanian cities, plus in case of Linz, Debrecen and Plovdiv with a value above 60 per cent.

RESULTS
The paper offers the advanced producer service geography of the metropolises of Central Europe, based on management consultancies and accountancy companies.
Advanced producer service firms concentrate their capacities geographically. If a critical mass of economic performance is present in a city, it becomes a potential venue for APS companies that can further strengthen the city's regional  Iasi Bydgoszcz, Debrecen Source: own editing based on Eurostat data, metropolises only with an accountancy network 75 per cent of the sample concentrates at least five APS companies, which already represents a critical mass (less than half of all metropolises of the macro-region). Cities with less APS presence have a weaker economic performance and are primarily industrial cities.

DISCUSSION AND CONCLUSION
Here the presence of manufacturing companies justifies the presence of the advanced producer service firms. Five metropolises have only the presence of a network type of accountancy, which indicates an even lower economic performance at the moment, however with a development potential in the near future. Western Europe, they are not able to act as counterparts, or as an expansion of Western European economic zones, but rather act with a regional role in their surrounding region. While some time ago the statement, the more multinational seat a city has, the more economic power it has in world economy, was still valid, today the picture is more diverse. In many cities the connection is still expressed, however the business centre and venues of production activities do not coincide in regions with an outstanding infrastructure and excellent accessibility. Proximity of markets mean the relative closeness of manufacturing multinationals for APS companies, in which case the same venue is not a prerequisite, however a location is needed, from where a broader scope of markets in a country is accessible, and where travel costs are lower as compared to costs of establishing a new APS office. This interrelatedness is shown by the examination of relations between APS and MNC locations. The high R 2 value (above 70%) is justified by the outstanding values of the capital cities that have a high MNC concentration with decision-making seats.
The macro-region was characterized by a low level of urbanization in the 1950s, level of urbanization exceeded 50% only in Austria, Czech Republic and Hungary, and also today it falls behind the level of Western-Europe by 10% (70% vs. 80%).
Although operative communication is ensured by the info-communication technology, personal strategic negotiations remained part of the business protocol. Communication costs were highly reduced by ICT infrastructure in the daily operation of APS offices, which can be tracked in bandwidth and speed. However, physical accessibility is a decisive location factor in case of APS companies further on. In order APS companies identify the most optimal market coverage and office number, the locations should be accessible via main transport routes and international airports. The indicator of accessibility shows a rather homogenous region of metropolises with a general value around 50%, however the realization of the TEN network shows still large differences, and in many cases it is not sufficient. and relatedly the even spread and good accessibility of the historically developed regional seats explain the values. The factors are more complex in case of Polish metropolises, there are bigger differences in accessibility, and geographical spread of the cities is uneven with a concentration in the South-western part of the country. Romania is less developed, but a country with large territory and number of population within the examined macro-region, with weak in-country accessibility relations. As the capital city location is unfavourable, it is like an island within a less developed area in the South-eastern part of the country, further cities like Cluj Napoca and Timisoara receive a relatively more powerful position in APS ranking.
Geographical and spatial factors as additional locational factors specify APS firms' locational strategies further. Such a factor is the distance from the capital cities, the farther a metropolis from the capital city lies, the more chance it has for getting integrated into a network, however a minimum level of economic development or manufacturing companies' proximity is needed. Kosice in Slovakia, Debrecen in Hungary and Split in Croatia has a market position justified by the distance from the capital, however, the latter two are involved only by an accountancy network.
The geographical location of the capital also influences the positions of other metropolises in the APS network. In some countries, like Austria, Slovakia and Bulgaria the capital city lies in the very East or West of the country, but it can be stated in the case of Warsaw and Bucharest as well that they are located in a less developed area. In such cases secondary cities gain more significance than expected as a consequence.
The APS company locational decisions mirror the poly-or monocentric structure of the countries. The metropolises involved in Austria, the Czech Republic and Romania show a polycentric distribution, however, the GDP level of Romania does not demand the whole polycentric coverage of the country, the main nodal points are the metropolises with outstanding economic performance.
Thus, the main development nodes of the macro-region are: 1) the five global capitals (Vienna, Warsaw, Prague, Budapest, Bucharest), but also the remaining capitals are catching up, 2) Western part of the macro-region showing a better economic performance (Austria, the Czech Republic, the Western part of Poland), 3) the South-western part of Poland concentrating powerful metropolises. Although the new type of concentration does not form new inner peripheries, their dispersion can be said to be even, albeit not with the same density in countries with different economic levels.