This paper focuses on the issue of spatial differentiation stimulated by dissimilarities in the economic structure of regions/settlements. After the transition period, two distinct models of economic revival and development emerged in Hungary. One, embodied by Budapest, is that prosperity rests on the tertiary sector. However, industrial output outweighs all other economic indices in regional differentiation in the remainder of the country, as a consequence of the investment strategies of multinational companies. The main factors, agents and impacts on regional differentiation in this non-knowledge-based economic development model are revealed.
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