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Strategic market entry barriers in Hungary
91-107Views:203This study is a continuation of a former project of the same research team. The focus of the research is market entry in Hungary for foreign firms, along with strategic entry barriers to both domestic and foreign importers to Hungary. A comparison of our findings from 2003 and 2008 gives some insights into the integration of the Hungarian domestic market into the Single European Market. Practical advice is offered to Hungarian market players on the scope of strategic entry barriers in Hungary as well as the ways entrepreneurs assess them.
JEL classification: F13, F14, F15
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Analysis of labor market in Northern Hungary
84-102Views:223The aim of the paper is to reveal the main causes of unemployment and understand the labor market situation in Northern Hungary, as well as quantify and evaluate the changes in the employment structure. The main concern is about the changes in the number of registered job-seekers in Hungary and in particular, in the North Hungarian region. The author uses several tools to investigate this issue, such as shift-share analysis, linear regression, Lilien-index and Beveridge-curve. The Lilien-index suggests that in Northern Hungary the flow of sectoral labor force has exerted less and less influential power on employment since the transition. Job vacancies and the high number of unemployed do not meet in Northern Hungary; the reason for that is the inadequate qualification level of the unemployed. The labor market position of the North Hungarian region is determined by the specific socio-economic situation resulting from the transition, so it will be useful the regionally differentiated employment policy in Hungary.
Journal of Economic Literature (JEL) codes: J21, R23
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Human Resources Management in the Changes in Hungary In the Light of Two Consecutive Cranet Researches: Két egymást követő Cranet felmérés eredményei alapján
92-110Views:371Management, including Human Resources Management, has undergone major changes in Hungary since the economic and political changes of 1989. This area is even regarded as a field of continuous transformation. This study makes an effort to compare differences and similarities of specific features of Human Resources Management in Hungary in the light of two consecutive surveys, Cranet 2005 and 2008 (Cranet is an established group of top business schools and academic institutions, all collaborating to provide unique and rigorous data on human resource management practices across the world). According to these analyses, the study compares typical characteristics and practices of Human Resources Management in Hungary with major trends and tendencies of this field in 32 countries, including 6 countries from the Central and Eastern European region as well.
JEL classification: J24, M1, M54
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A gazdasági növekedés gyorsításának esélyei Magyarországon 2030-ig
5-26Views:121The regime change in 1989/1990 has not produced the expected result: Hungary has not been able to catch-up with the Western market economies. Can Hungary grow 2-3 times faster then its competitors during the next 20 years, as the present Hungarian government declared in its economic plans? Can Hungary improve its relative position and catch-up with the per capita GDP level of the EU-27 average by 2030? The conclusion of the paper is that this is very unlikely to happen. But there is ample room for accelerating productivity growth, and in this regard, every percentage difference counts enormously in the long-term. Three factors of production are analyzed: the natural-physical-geographical endowments of Hungary (N), Labour (L) and the capital stock (C). The following new findings are discussed. First, contrary to the widely held view, the amount of labour currently used by the Hungarian economy is not low in international comparison. The education of the workforce is also adequate. The problem is its allocation: too many workers are employed in low productivity, small firms. The only way forward is to promote the concentration of enterprises, to support the increase in the number of medium-sized and large firms. Second, the rate of domestic savings needs to be increased considerably, to allow for a low-cost financing of investments. In turn, this requires a substantial reform in three areas: healthcare, pensions and higher education. As long as the welfare state exists in its present form and these three spending items are largely financed by the state, one cannot reasonably expect households to save and accumulate families" long-term reserves in financial assets. But before these changes happen the political alite must accept that the obstacles to productivity growth have to be removed from the legal and political stuctures.
JEL classification: E66, O47, O50, O52
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Agricultural employment in Hungary and the North-Great Plain region
Views:122The transition deeply effected the economical sectors of Hungary. The role of agriculture within the economy reduced, its contribution to the GDP is now less than 4%. These developments caused considerable changes within the structure of employment in agriculture, a process which corresponds to EU trends. The North-Great Plain Region is situated in the northe-east part of Hungary and can be considered a typical agricultural area. In this region the GDP per capita has been one of the lowest in Hungary for several years. The reasons for this are as follows: the dominant role of agriculture in comparison with other sectors of the economy, the low profitability of agricultural production and related activities and the high ratio of less developed areas within the region. Agriculture plays an important role in this region because it provides workplaces for local people, reducing their migration into big towns and contirbutes to the rural development of the region.
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Production Efficiency Analysis of the Hungarian Meat Processing Industry
23-42Views:127This paper analyzes the performance of the Hungarian meat processing industry in the wake of the global financial crisis. Between 2011 and 2013 many high-capacity meat processors went bankrupt in Hungary. Possible reasons for that could be unfavorable market situation and inefficiency in production. In this paper, the latter hypothesis is examined. Two different types of production function estimation techniques are used to calculate firm-specific inefficiency estimates. Based on the estimation results, the lower bound of average firm-level efficiency is 0.50, while the upper bound is 0.88. Estimated firm-level inefficiencies are compared to the characteristics of the given firms. Pre-tax profit, company size and domestic ownership are associated with lesser inefficiency. On the other hand, time trend of inefficiencies indicate that the global financial crisis negatively affected the production efficiency of the meat processors. This can be a reason behind the bankruptcies happened.
Journal of Economic Literature (JEL) codes: C33, L66
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A comparison of efforts to set up cluster initiatives in two Hungarian regions – submitted cluster proposals in North Hungary and the Northern Great Plain
133-140Views:104The Hungarian government has taken the initiative to finance the formation of new entrepreneurial co-operations using the cluster theory. It is not certain whether or not the Hungarian economy is ready for an initiative such as this. In North Hungary and the Northern Great Plain (two Hungarian NUTS 2 regions) project teams set up fresh clusters to obtain the subsidy – as in other regions. Their level of cooperation, the number of submitted projects and the ratio of successful projects tell us if theory and the western practice fit with the local needs - if Hungarian companies want to work and can be successful in clusters or not. In this article I examine the willingness of regional business actors to cooperate and start new business networks in the framework of the 2008 regional cluster calls. The two regions have similar but not identical results.
JEL classification: R58, L2
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The Comparative Analysis of the Cultural Financing Models of France and Hungary
50-67Views:148Both France and Hungary use the so called coordinated cultural financing model, in which the active role of the state is decisive. However, instead of producing a similar model, the level of the cultural sector value added to GDP in the two countries is different. The article’s aim is to answer this puzzle. The focus is on the role of institutions and state subsidy. The analysis tries to understand whether direct state subsidy plays a decisive role in the economic performance of the cultural sector. The analysis also shows whether the harmony of formal and informal institutions have a positive effect on the economic growth of the cultural sector. The assumption is that the size of direct government subsidy cannot increase economic growth. If the formal and informal institutions are in harmony, and if there is a long-run cultural policy strategy in a country, the cultural sector value added to GDP is higher.
Journal of Economic Literature (JEL) classifications: Z10, Z11
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The shadow price of childbearing and the total fertility rate in Hungary
31-61Views:204The total fertility rate has been declining sharply in Hungary since the democratic transition. Moreover, the rate has been well below the replacement level since the second half of the 1980’s. It is therefore relevant to investigate the underlying factors behind the permanently low level and continuously declining trend in the rate. In this article, based on Walker (1995), I present the time series of the shadow price of childbearing in Hungary, with which I estimate the total cost incurred by the first-born child, using empirical data. I introduce the connection between the total fertility rate and the increasing mean age at birth. Subsequently, I first compare the tempo and parity-adjusted total fertility rate to the shadow price of childbearing, and then conduct a partial analysis. Based on the results, I recommend measures for public decision-makers that could positively incentivize childbearing
Journal of Economic Literature (JEL) kódok: J11, J13
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The dynamic of Hungary's Agro-Food Trade in the Global Economy
26-35Views:107We analyse the evolving pattern of Hungary's agro-food trade using recently developed emprirical procedures based around the classic Balassa index and its symmetric transformation. The extent of trade specialisation exhibits a declining trend; 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 a less persistent pattern. They are stable for product groups with comparative disadvantage, but product groups with weak or strong comparative advantage show significant variation. The results reinforce the finding of a general decrease in specialisation but do not support the idea of self-reinforcing mechanisms, emphasised strongly in much of the endogenous groeth and trade literature.
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The examination of the relationship between foreign working capital investment and economic growth on the basis of European examples
150-166Views:104In the past decade several studies have been published in Hungary as well on the role of foreign working capital investment and the economic effects of the presence of multinational companies. This paper explores what role working capital investments (their type, size etc.) have played in the transformation and modernization of Hungary and in her integration into world trade. After a short theoretical and historical survey it presents the experience of some European countries which the literature often mentions by comparing them to Hungary, for on the basis of their size, population, geographical location and level of economic development they have often met similar economic policy dilemmas and choice-making. Then it examines what effects foreign working capital influx had on the given economies and - ina wider sense - on their social development, and in addition, what kinds of undesirable consequences it had.
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The Roots of Euroscepticism in Hungary.: Economic Policy and Perceptions of the European Union in the Crisis
5-22Views:278The paper explores the relationships among three factors: economic policy, its evaluation, and perceptions of the European Union. It considers Hungary’s recent decade, primarily the years of the recent global financial and economic crisis. The analysis compares Hungary’s economic statistics and attitudes with those of other countries on the EU periphery. The main questions are the following: why and how Hungary has become a eurosceptic country? On what does the image of the EU (created in the population) depend? Is there any link between how the economic policy is being pursued on one hand, and the attitudes towards the EU, on the other? Is the evaluation of the national economy confirmed by the hard facts?
Journal of Economic Litterature (JEL) classifications: O520, Z130, P160
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The Cross-border Mergers’ Market and Financial Characteristics from the Perspective of Foreign Direct Investments in Hungary
30-46Views:183One 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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Strategic directions of international degree mobility – examining the motivation of foreign students studying in Hungary and the factors influencing foreign studies
3-38Views:347In the scope of our research, we examined the motivation of foreign students studying in Hungary. The objective of the applied questionnaire survey was to explore the possibilities both on the supply and demand side based on which young people who wish to study outside their home country identify Hungary as a potential destination country. In the first phase of the research, the statistical study of inward student mobility was performed. The image of Hungarian higher education is interesting also because, although the countries sending the most students are still in the neighboring countries (Slovakia, Romania, Serbia and Ukraine), there is a dynamic growth in terms of the number of students from Norway and Asian (China, Iran) and African (Nigeria) (Statistical database of the Office of Education). In the second phase of the research, the questionnaire survey was conducted seeking the answer to the following: what factors played a role in the decision of foreign students to study abroad (when did they decide to study abroad, where did they obtain information, what were the factors that influenced their choice of country and institution, etc.). How satisfied are they with the chosen training, with the organization education and what are their plans following the completion of the training? What prior information was available about training and subsistence expenses, what were the sources of funding, how did the costs of subsistence develop and what were the returns on these expenses, what was the proportion of leisure time and studying, and what were the options of spending leisure time? - How satisfied are they with institutional services (technical equipment, classroom facilities, library service, and institutional programs)? In the present article, we cover the factors influencing foreign studies considering the limitations of the scope.
Journal of Economic Literature (JEL) codes: I2, J1
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Exit strategies of family businesses in Hungary
43-63Views:225The study aims to examine the ownership transmission strategies in the context of family firm succession in Hungary. The successful transfer of ownership, management and acquired experience at a family firm represents one of its greatest challenges; however, there is still a lack of understanding of the unique future strategies and succession outcomes of Hungarian family businesses. As a significant proportion of the founders of those family businesses established after the regime change (post-1989) are now reaching retirement age, a study of how such business organisations plan to survive the generational transition is highly relevant. This study applies a mixed methodology of quantitative and a qualitative analysis (e.g.,
in the case of IPOs). The results show that the average age of the examined family firm CEOs is higher than the global average and the majority of them plans to keep ownership and management within the family. Other exit strategies (i.e. initial public offerings, mergers and acquisitions) are not typical of the examined sample. -
Roadmap for the adoption of the euro in Hungary: dangers and opportunities
Views:151In April 2003, the EU Accession Agreement was officially signed for the Czech Republic, Estonia, Cyprus, Hungary, Latvia, Lithuania, Malta, Poland, Slovenia and the Slovak Republic. These countries are destined to become EU members in May 2004. As part of the “acquis communautaire”, participation in the new version of the exchange rate mechanism (ERM II), and subsequently in the European Monetary Union (EMU) is obligatory for all new EU members (no opt-out clause is available). Therefore, the question today for the accession countries is no longer whether or not to enter the eurozone but rather the time horizon when the entry should happen.
Journal of Economic Literature (JEL) code: E42, E58, F33.
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Twenty-one Economic Arguments against an Unconditional Basic Income
5-29Views:362In 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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Trends and Tendencies in the Development of HR Departments in Hungarian State Universities
115-146Views:274In the last couple years it has been fully accepted that human resource management plays an increasing role in the success of organizations, and also in the development and sustainability of national and international competitiveness (Gordon- Whitchurch, 2007). In the developed industrial countries – mostly the Anglo-Saxon pioneers – public institutions (including higher education) abandoned the normative and bureaucratic-controlled Taylor system (Karoliny et al, 2003). Beginning in the 70’s representatives of the New Public Management model, based exclusively on the effectiveness of business solutions, gained more ground. The early 80’s brought the widespread implementation of reform programs. These efforts have created models and experience that were applicable in the converging countries of Europe – including Hungary. After reviewing the latest professional literature and analyzing practices of eleven Hungarian universities we will assess the conversion of Human Resource Management and consider possibilities for modernization.
Journal of Economic Literature (JEL) classifications: I21; H19; M52;M53;M54
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A Review of Hungarian Research Antecedents and the Assessment of Fair Trade in Hungary
54-68Views:474Fair trade is a civil initiative aiming to provide fair conditions to the poor producers of the Third World and enable them to follow a sustainable model of development. This realigned commercial partnership is to modify the rules of traditional international trade between the producers of the southern nations and purchasers of the northern hemisphere and replace them with a novel alternative. Fair trade has unified techniques of labeling and a well-established institutional system in order to change the rules of the game that have controlled the dominant economic model. The main tool of the movement is the engagement of conscious and socially responsible consumers towards the topic. This review summarizes the Hungarian reports and studies done about the issue so far and introduces the present circumstances in Hungary.
Journal of Economic Literature (JEL) code: F13, F18, J81, P45
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Trade Advantage and Competitiveness of Hungarian Agri-food Exports with the European Union
87-102Views:94The 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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The shift from Office to Customer Oriented Culture: the Case of the Hungarian Post: Liberalizáció és szervezeti változások a postai szektorban
143-158Views:235The case study is conducted within the framework of organizational change and organization innovation, and examines the changes in knowledge requirements and the alterations caused by the liberalization generated by the Magyar Posta Zrt. The study focuses on the transformation of official attitudes, the make up of the required knowledge and how organizational changes have facilitated the development of a customer-oriented organizational structure. Based on the interviews conducted, the conclusion is that the process of “providing service ex-officio” has not yet been completed, but the employees are increasingly becoming involved in a client-centred approach. On the management level the preservation of the hierarchy and the status quo have more importance than the expression of the new organizational values.
Journal of Economic Literature (JEL) classifications: D23, M14
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Network Analysis for Market Surveillance
19-33Views:143Our analysis has focused on the network structure of the credit default swap (CDS) market because relatively few publications have appeared on this segment of the financial market. The article puts emphasis on a proposed new supervisory tool which uses network science in market surveillance of the Hungarian financial market. Our research results are compared to those of a previously published ESMA analysis, where the writers applied network science to analyze financial market contagion risks. As a result, the article concludes that the Hungarian sovereign CDS market network structure is similar to the European one in the sense that it is highly concentrated.
Journal of Economic Literature (JEL) codes: G14, C45
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The structure and the behaviour of the capital of cooperative banks
59-77Views:100Today cooperatives are unable to function according to traditional cooperative principles, as the changes in the economy have altered the basis for the operation of cooperatives as well. There are a number of regulations affecting the members of cooperatives and investors ranging from the foundation to the ditribution of dividend, from the volatility of capital to investing into a cooperative, which are carried out in comparison with other forms of investment in the market. By now in Europe debates about cooperatives have become more heated; the documents of the European Union especially the ones concerning social economy also testify to this. It is for this reason that the study has chosen the examination of cooperative banks. The authors present the structure of cooperative banks, the changes in the structure, as well as the behaviour and characteristics of cooperative capital.
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HR Funtion Under Changes at Subsidiaries of Foreign Multinational Firms in Light of an Empirical Study in Hungary
98-116Views:425Following almost two decades of multinational companies (MNCs) operating in the transitional economies of Central and Eastern Europe (CEE) expatriate and local managers continue to ask the following question: “How can we effectively manage the available human resources from our subsidiaries or assignees from the corporate centre?” A model of human resource (HR) practices in the subsidiary units of MNC’s in Hungary was developed from a review of the literature, extensive professional experience in the region and an interview-based survey at 42 subsidiaries of large multinational companies. This model describes the evolution of different HR variables in the light of external (macro) and internal (firm specific) factors.
Journal of Economic Literature (JEL) classification: M16, M51, M52 és M54
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Chance for a more liveable Hungary
5-18Views:100This study examines the question of how successful the transition of Hungary in social fields has been over the last two decades. It comes to the conclusion that, besides the successes in the economy and the deficits in the social spheres, the reserves of the first one and a half decades are approaching exhaustion. The accession to the EU creates a chance, but not a guarantee, for the next period to be a success. The challenges for the country are very different in 2007 from what they were in 1995. For this reason we try to show directions for sustainable growth and more fruitful social politics.