Corporate Concentration and Labour Conditions in Hungary’s Food Industry: Evidence on Wages, Bonuses, Working Time, and Workers’ Rights (1993–2022)

This study examines the relationship between corporate concentration and labour market conditions in Hungary’s food industry over the period 1993–2022. Using industry-level panel data for the four most highly concentrated subsectors, cereals, food processing, oils and fats, and sugar and confectionery, corporate concentration is measured using the Herfindahl–Hirschman Index (HHI), and a two-way fixed-effects panel regression model is employed to assess its association with wage structures, working-time arrangements, and employment composition. The results reveal a statistically significant negative relationship between corporate concentration and both gross monthly earnings and base hourly wages. A 1000-point increase in the HHI is associated with an approximately 10 percent decline in base wages. Higher concentration is also positively associated with greater reliance on part-time employment and increased overtime intensity, alongside a significant reduction in paid leave provision. Importantly, when variables capturing working-time arrangements and employment structure are incorporated into the earnings model, the direct effect of concentration becomes statistically insignificant. This pattern likely reflects the fact that these variables are directly embedded in the determination of gross monthly earnings, suggesting that the effect of concentration operates indirectly through adjustments in working time and employment composition rather than through a purely independent channel. This finding suggests that the impact of concentration on wages operates partly through structural adjustments in compensation systems and increased labour flexibility. Overall, the evidence indicates that corporate concentration in Hungary’s food manufacturing sector does not necessarily reduce nominal earnings but instead reshapes their composition. The role of base wages weakens, while regular bonuses emerge as the primary mechanism of income adjustment, increasing managerial discretion and income volatility. These findings contribute to the literature on labour market monopsony in transition economies and underscore the importance of integrating labour market considerations into competition policy frameworks.