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Data mining through a business window (Part II.)
108-130Views:131This article demonstrates the real world applications of the technology of data mining by way of a data mining project. This project was created by the author and the analyzed database was provided by a real company. The aim of the analysis was to create a classification model for this firm. To achieve this we applied logistic regression models, a decision tree and a neural network. The best model can help the company to consciously establish which customers will probably respond positively to a personal letter in a direct marketing campaign. In this way potentially favourable customers are reached more efficiently than in the case of randomized selection. This increases the efficiency of the company, and the generalization of results can confirm several advantages of data mining as used in business life.
JEL classification: C25, C44, C45, C49, C88
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Adatbányászat üzleti szemmel (I. rész)
Views:90Organizations in the 21st century - whether they are profitoriented or not, in private ownership or state-owned - can increase their efficiency with an outstanding tool. This tool is data mining. This article first of all defines and presents data mining, and locates it in the process of 'Knowledge Discovery in Databases'. Following this we review the fields of employment of data mining and the basic methods employed. In particular we discuss the method of classification and the theoretical background of the main techniques, such as decision trees, neural networks and logistic regression models. The second part of this paper presents the real world application of this technology by way of an analysis of a real database.
Journal of Economic Literature (JEL) classification: C25, C44, C45, C49
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Revealed comparative advantage in Hungarian agriculture: a chaotic or coherent pattern?
59-82Views:104We describe the evolving pattern of Hungarian agri-food trade using recently developed empirical procedures based around the classic Balassa Index at various aggregation level and different bechmark between 1992 and 2002. Our results shows a significant geographical differences and across sub-sectors of 1, 2, and 3 digit SITC classification. The extent of trade specialisation exhibits a declining trend for all benchmarks; Hungary has lost comparative advantage for a number of product groups over time. The indices of specialisation have also tended to converge. For particular product groups, the indices display greater variation. They are stable for product groups with comparative disadvantage, but product groups with weak to strong comparative advantage show significant variation.
Journal of Economic Literature (JEL) classification: Q12
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The Development of Growth Accounting Techniques in the Mirror of Economic Growth
85-103Views:136In this article we present the development of certain growth theories that model the main sources of growth. Since the elasticity of substitution – one of the most important parameters of production function – is not unity, as the Cobb-Douglas production function assumes, it can be different from a value of 1; hence we need a more general CES-type (Constant Elasticity of Substitution) production function. Another important question is the classification of factors of production. The elasticity of substitution is an efficiency factor as well, thus it receives special attention in the analysis. Finally we summarize the main papers that are mainly concerned with growth accounting, and try to answer the question of which factors play a significant or less significant role in economic growth. Growth accounting is strongly connected to growth theories so we refer back to growth theory at certain points.
JEL classification: E13, O47
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The growing state presence in the world economy: Sovereign Wealth Funds
149-166Views:231While sovereign wealth funds (SWFs) were formerly considered to be passive financial investors, today we can see their active presence in international capital markets. The aim of this study is to give an overall view of these funds, which are becoming increasingly important actors in the international monetary and financial system. This study presents the formation and purposes of sovereign wealth funds, as well as the main factors contributing to their growing presence. Moreover, this study provides an insight into the investment activities and practices of these funds.
JEL classification: E58, F21, F30, G15
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The role of dynamic relationship capabilities and loyalty in organisational relationships
76-92Views:227In this study we try to answer the question of how Hungarian organisations can be depicted in terms of relationship management in networked relationships, and how the nearly fouryear global economic crisis influences the perception of relationship capability and B2B loyalty in organisational relationships. First we review the theoretical background of dynamic relationship capabilities and B2B loyalty, then we show our empirical research results, and we try to identify the factors involved in relationship management and B2B loyalty. From our point of view relationship management has an effect on B2B loyalty, and we support the hypothesis that where relationship management is a conscious action, there are evolved procedures for this. These connected mechanisms have a positive impact on the evaluation of relationship quality and contribute to partners’ loyalty.
Journal of Economic Literature (JEL) classification: M10, M14, M31, M39
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A reklámberuházások versenyre gyakorolt hatásának és gazdasági növekedéssel való összefüggéseinek vizsgálata
Views:109The amount of advertising investments is increasing dynamically worldwide, but returns are decreasing significantly. This is largely the consequence of growing market competition. In connection with this I analyze the role of advertising and the effect of advertising on demand and competition, then I study the relation between advertising and economic growth in this paper. I have conducted a survey among European countries to scrutinize the relation between advertising expenditures. My other assumption had to be rejected as a positive relation does not exist between GDP per capita and advertising investment rate.
Journal of Economic Literature (JEL) classification: D21, E01, M21, M37
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Quantophrenia? – Some remarks on the possibilities and constraints of mathematical formalization in economic and social sciences
5-18Views:106This article deals with some aspects of the constraints to the formal mathematization of economic theories and models. It points out that complex, dynamic and open systems dispose of a memory so that past events, statements or beliefs, even if they have turned out to be wrong or untrue, exert a potentially significant influence on the present state of issues, so they cannot be completely substracted from models representing reality. Reference is also made to the fact that in such complex, evolutionary systems strong interdependences and interactions exist between the subject and the object of scientific inquiry since economic actors strongly influence each other and, consequently, aggregate reality through their mutual actions and expectations. Furthermore, it is argued that the comparability of findings is highly dependent on the identity or dissimilarity of the initial conditions of the objects of economic research. The article does not take a position either for or against mathematical modelling; it limits itself to comments on some of the conditions of meaningful formalization.
JEL classification: A1, B10, B41, C10
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Business Ethics and Ethics Education in American Business Programs
195-200Views:90This essay presents an overview of what American business programs cover in their curricula regarding ethics and the reasons behind teaching ethics-related material to business students. Topics for the paper
include; requirements for having ethics in the curricula, broad perspectives of what constitutes ethical business practices, and the difference between professional ethics and business ethics.Journal of Economic Literature (JEL) classification: M14, A20
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A Journey Through the Theory of Economic Development
Views:101The theory of development economics changed signifcantly from the first attempts of defining the concepts in the 50s until nowadays. The contributions to the development theory are at the same time closely related to the historical context of the underdeveloped and developing countries. This paper tries to facilitate the understanding of the way development economics evolved, by presenting the main contributions to the theory. The research methodology used in this study is analytical, based on the gatherinf of the information, its organisation in a logical way, the presentation and analysis of the most significant ones, and finally the drawing of relevant conclusions. The main findings of this paper are that after five decades of strong ideas and recipes of economic development we have reached a point of uncertainty regarding what is beneficial or harmful for the nations' economic development.
Journal of Economic Literature (JEL) classification: O10.
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Regional netwrok cooperation
115-130Views:106The current study aims to reveal the regional network cooperations - found primarily in the construction industry -, in particular in the Észak-Alföld Region. The study includes three main parts: after the industry analysis of the construction industry a short summary follows about the theoretical bases of today's business network cooperations, clustering, and such relationships especially among firms operating in the construction industry, and finally it is closed by a case study revealing the relationship network of a dominant construction company of the Észak-Alföld Region. The most important finding is that in Hungary clustering in the construction industry - that has already existed in several developed economies - has not started yet, however, networking - that can be the basis for the development of a construction industry cluster - has already began, and if it continues, it further increased the advantages already experienced.
Journal of Economic Literature (JEL) classification: L140, L850
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The characteristics of the Hungarian cafeteria system examined in the context of changes in tax laws
126-132Views:101The article deals with the system and function of optional fringe benefits in the Hungarian labour law as well as with the taxation rules in connection with fringe benefits. In this context, we deal firstly with the conditions of the use of the cafeteria system and present the advantages connected to them. Then, the individual regulation of different allowances which are grouped according to different criteria is analysed, with special emphasise on the changes in tax law.
JEL classification: J32, K34
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The Cross-border Mergers’ Market and Financial Characteristics from the Perspective of Foreign Direct Investments in Hungary
30-46Views:180One of the methods with which foreign corporations practice direct investment is CrossBorder Mergers and Acquisitions (CBM&A). This can be proved by statistics: globally until the mid 1990s CBM&A accounted for about 50% of total Foreign Direct Investments (FDI) and reached 100% in 2000. This trend was not typical in Hungary. However, it reached 100% in 2009. I have two goals in this study: the first is to analyse how this phenomenon occurred in Hungary. In my study I analyse not only the correlation of CBM&A and FDI, but also foreign portfolio investments. My other goal is to analyse the characteristics of CBM&As from the perspective of FDI. I analysed the 343 decisions made by the Competition Authority. Finally, I compared these results with the features of FDI, which support and complement the results gained through statistical calculations.
Journal of Economic Literature (JEL) classification: F21
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The Risks of Global Financial Markets and the Importance of Credibility: Implications for Hungarian Fiscal Policy
27-44Views:86The central issue in the controversy about the adoption of the euro in Hungary is the difficulties associated with the fulfillment of the fiscal criterion and the possible growth sacrifice it requires. In this paper the author examines the question whether the strategy of delaying entry into the euro-zone implies that fiscal consolidation can be delayed as well. In approaching the problem the paper considers the origins and history of the present-day global financial markets and argues that given the high degree of systemic risks individual countries face responsible macroeconomic policies are crucial in minimizing vulnerability to
crises. Consequently in order to avoid excessive interest rates and speculative inflows (or currency crisis in the worst case scenario) fiscal deficits in Hungary would have to be cut and credibility of fiscal policy reestablished even without EMU accession. The overall conclusion from this overview is that delaying entry in order to delay fiscal adjustment is likely to increase the trade off between real and nominal convergence instead of mitigating it.JEL classification: F33, F41, H62
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Issues of the Regulation of Residential Credits
44-51Views:175The study focuses on the theoretical and practical issues of lending from the legal regulation point of view. After the 90’s the consumer social model was set up in Hungary, and it was linked to a fairly broad consumer credit activity. However, the regulation of lending was insufficient in many areas; consumer protection has hardly existed in the financial services market. Debtors were unprotected when facing the financial institutions, which concluded contracts not in their favour and restricted their rights. The economic crisis, and the great number of insolvent debtors, has emerged as a social problem for legislators, thus enabling them to amend lending rules and strengthen consumer protection in this area.
JEL classification: K 30
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The option value of education
131-148Views:75Within the theoretical frameworks of standard human capital theory countless analyses have been carried out into investment decisions, in which the examination of the uncertainty of the costs and benefits of education were mostly disregarded and an assessment of the option opportunities was often omitted. In this essay we tried to review one of the extension opportunities of the theory of standard human capital and the option approach of human capital investment. We looked for an answer to the question of what kind of models have been developed for the interpretation of education as an option and for the determination of the option value of the investment. In the study we have highlighted the fact that a decrease in uncertainty in human capital investment is as good an incentive for investing in more education as the public subsidization of education.
JEL classification: C6, D8, I2, J2
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The Effect of the Economic Crisis on Income Poverty in the Southern Great Plain Region
61-75Views:110The paper examines the effect of the economic crisis and the related negative economic phenomena on the income poverty of those living in the Southern Great Plain region. The regional income poverty is examined using the poverty measures based on the income data of workers and wage earners. I then analyse how economic performance affects poverty measures. The analysis proves that not only the economic growth of the given county, but also the economic performance of the neighbouring counties have an effect on the poverty rate. Economic growth, however, is not enough to reduce the depth of poverty; therefore other measures to improve the conditions of the poor are also required. In the end, the spatial autocorrelation is examined in the Southern Great Plain region.
Journal of Economic Literature (JEL) classification: I32, R12
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Chile and the Global Depression
132-146Views:119The 2007-2009 economic crisis ended an exceptional, five year-long economic boom for Chile and other countries in Latin America. The most beneficial economic outcome of the upswing was the fundamental improvement of the region’s countries in terms of the current crisis, which greatly reduce these countries’ vulnerability to external economic shocks. Based on the previous assumption several economists shared the opinion that “This time things are different”. That is, the fate of the continent in the current crisis will be decided differently as the global downturn has barely affected the region’s economic indicators. However, from September 2008 it has become apparent that the continent’s economy remains vulnerable. The crisis, which has infected the real economy through multiple channels, has reached two major victims of the recession, - Latin America and Central and Eastern Europe – leaving them with a decline in GDP per capita and the slowdown of economic growth. Conversely, Chile experienced a decline of a lesser extent due to its structural reforms and was able to re-orientate to its previous growth path much quicker than the rest of the continent’s economy after the ending of the crisis.
JEL classification: O54, H12, O20
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Trade Advantage and Competitiveness of Hungarian Agri-food Exports with the European Union
87-102Views:88The complementarities of trade advantage and trade competitiveness measures for Hungarian agro-food trade with the European Union are analyzed. The stability and duration of the trade measures over time is investigated by survival analysis using the nonparametric Kaplan-Meier product limit estimator and the consistency test between the trade measures is conducted by the stratified Cox proportional hazard model. Hungary experienced a greater number of products with relative trade disadvantages and a greater significance of one-way imports. Hungary also experienced relative trade advantages for bulk raw commodities, processed intermediates, and horticulture, with the greatest significance of successful quality competition and one-way exports, and the lowest significance of unsuccessful price
and unsuccessful quality competition. The duration of relative trade advantages is longer than the duration for the successful trade competition categories. Our results confirm that relative trade advantage is consistent with the one-way export and the successful price and successful quality competition categories in two-way trade on the one hand, and relative trade disadvantage with the one-way import and the unsuccessful price and unsuccessful quality competition on the other.Journal of Economic Literature (JEL) classification: Q12
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Scarcity and Uncertainty Reduction by Institutions
Views:81Institutions are not equally able to reduce scarcity and uncertainty. If institutions were classified from this point of view we would acquire a new analyticaltool to examine institutions in the past the present or the future. Scarcity and uncertainty appear continuously and institutions can manage them only by a greater increase in individual responsibility. However, this also increases the danger of the disintegration of community. We can see this application in practice by surveying the Hungarian pension system over the past 100 years.
Journal of Economic Literature (JEL) classification: A11, B52, G18, G23
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Corrupt German companies? A political economy approach to German corporate scandals of recent years
97-114Views:96The paper seeks to explain German corporate scandals of recent years from a political economy point of view, adopting a 'varieties of capitalism' approach. Scandals have taken place in two realms of corporate activities: (i) in industrial relations defined by the system of Mitbestimmung that my well constrain corporate restructuring, and (ii) in export markets where corrupting foreign officials has always been a widespread practice among large exporting companies, including export-intensive German manufacturing corporations. In recent years institutional changes in domestic and international markets, including regulatory regimes, have significantly altered the set of viable options for corporate strategies. In consequence, large German companies have to adjust to new circumstances. Although the institutional underpinnings of coordinated market economies have been changing, German corporatism is not set to vanish yet.
Journal of Economic Literature (JEL) classification: P16, F55
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The role of sovereign wealth funds in the international financial system
111-125Views:147While sovereign wealth funds (SWFs) were formerly considered to be passive financial investors, today we can see their active presence in international capital markets. As their assets are continuously growing under their management, they are likely to have important impacts both on the financial services sector and international capital movements as well. The aim of this study is to give an overall view of the role of sovereign wealth funds assumed during the credit crisis, as well as of their possible impacts on the economic and financial system. The problem of transparency will also be discussed, namely the lack of it, which derives from the fact that most sovereign wealth funds do not disclose any information about their activities, operations, and investments. Moreover, this study provides an insight into policy responses made on the international level concerning SWFs.
JEL classification: E58, F21, F30, G15
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Twenty-one Economic Arguments against an Unconditional Basic Income
5-29Views:357In 2013/14 there has been an intense public debate both in the European Union and in Hungary on the feasibility of Unconditional Basic Income (UBI) support. In the Hungarian context, the publication of a 100-page proposal was an important milestone, in which a group of experts applied the UBI concept to the present circumstances. The study, the brainchild of István Bánfalvi, a distinguished social policy practitioner, proposed the following specific amounts as from January 2015: HUF 25,000 for children (≈ EUR 83), HUF 50,000 for adults and HUF 75,000 for expectant mothers. The present paper’s first objective was to challenge the entire 25-50-75 concept from both theoretical and practical-administrative perspectives. In addition, we tried to show that income poverty in Hungary is much less of a problem than generally presumed. Our final conclusion is that from a poverty alleviation point of view the geographical remobilization of the Hungarian Roma population is by far the most important issue. Roma living in small rural settlements should be assisted to move towards large cities, where the chances of finding work, education and health care are much better.
Journal of Economic Literature (JEL) classification: H21, I38, J15
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The Impact of the Economic Crisis on the Development Lifecycles, the Short-term Plans and the Strategy of the Actors in the Hungarian SME Sector
29-43Views:185This study was prepared in the third phase of a multi-year research project. The goal of the program was to analyse the growth trajectories and strategies of Hungarian SMEs. Research in the first phase was focused on the specific periods of typical company lifecycles, the second phase dealt with strategic thinking, methods of strategy formulation and the content elements of strategies. The findings and conclusions were published in the journal Competitio. The present study is a report on the findings of the third phase of the research program. It describes the consequences of the recent economic and financial crisis on SMEs. It describes how unexpected and radical changes in the business environment influenced the development of firms, how managers reacted, and how they considered short and long
term factors in their decisions.JEL classification: L21, L26, M1
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Unworthy poverty as social relations
43-60Views:415The paper deals with recent discourses on poverty, exemplified by the case of Hungarian Romany community. For this purpose we first deduce from the theoretical framework of the underclass three way of viewing extreme poverty: the political-economic type that traces poverty back to developments of the whole society; the culturalistic type in which poverty is the result of certain behavioural deficiencies (the “culture”) of the poor; and the interdependency type that regards poverty as induced by factors in the society as a whole and perpetuated by poverty specific cultural elements of the poor themselves.
In the second part of the study we discuss three fields of discourse with respect to the question of which of the mentioned types can be found there. In the field of social sciences it is preeminently the interdependency type which occurs, probably because of its capability to link many, even heterogeneous, observations. In public discourse – analyzed by considering an internet debate and two so-called scandals – the culturalistic type dominates: Romanies are poor, because they have Romany cultural (behavioural) deficiencies. The Romanies themselves mainly use elements of the political-economic type, explaining poverty in terms of general impoverishment, regional neglect, and group discrimination.Journal of Economic Literature (JEL) classification: I32, J15, J16, O15