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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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The prospects of uniformization of the internal market of electricity in the European Union
3-22Views:223The European internal market of electricity is not yet uniform, although it has been moving toward this direction for the last two decades. The energy market position of the consumers has been strengthening, the liquidity and the cross-border trade of the European electricity markets has been increasing. The stronger competition limited the wholesale prices. Despite the backsliding or stagnating household and industrial consumption, however, the retail prices and the costs have been increasing. The EU has to carry on reforming the electricity market in order to satisfy the need for more flexible energy-systems, to increase the competition, to make the consumers react to price changes in a more flexible way, to create more cost-effective governmental/market measures to handle price volatilities, to finance investments, and to minimise cost increases. The most recent comprehensive recommendations of the European Committee intend to create a new electricity market model, however, it yet remains to see the reception of these on behalf of the member countries.
Journal of Economic Literature (JEL) code: Q48
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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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Market institutions precede market beliefs: a test with cross-country regressions
3-30Views:247The paper examines the literature on culture, economic growth and institutions to derive hypotheses about the relationships between market beliefs, institutions, and productivity. It then tests these hypotheses with cross-country regressions. First, it points out that each of the four cause-and-effect hypotheses of the possible relationships have an economic literature, in that market beliefs are seen as parts of culture. Second, the paper tests these hypotheses by making use of the fact that they consider different variables as exogenous ones. Measures of market beliefs are the coefficients of the country-dummies in the regressions run with individual data from the World Values Survey. The tests support the two hypotheses which hold that it is institutions, not market beliefs, that are exogenous.
Journal of Economic Literature (JEL) codes: L26, O43, P16
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The achievement of market orientation in SME’s – results of a cluster analysis
22-45Views:152The aim of this study is to examine to what extent Hungarian SMEs adopt market orientation and what effect it has on their performance. The results of the examination show that the great proportion of SMEs do not adopt a market orientated approach. Among those that do, the effect of market orientation cannot be shown directly through objective indicators of their performance. At the same time it does have an indirect effect on efficiency, which can be observed over the long term. According to our results, the extent to which small and medium-sized firms adopt market orientation plays a significant role in owner-managers’ subjective estimations of performance. Consequently, emerging market consolidation occurring as the result of efficient operation can lead to a satisfactory outcome.
Journal of Economic Literature (JEL) codes: L20, M31
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Research of competence expectations in the labour market
75-107Views:753Company surveys and labor market prognoses point out that changes in the labor market significantly reshape the employers’ competence expectations
towards employees. Experts predict an expansion and significant rearrangement of competence expectations. At the same time, employees may experience very different expectations during the application process. Certain employers have high expectations, while in other companies these new high expectations are not perceived. Based on the results of our qualitive research examining the competence requirements towards fresh graduates, we seek to find out how domestic companies react to change when formulating their requirements towards their employees. In the light of the forecasts, we examine which competences are the ones where employers think of new and expanding content. In our work, competences as dynamic variables are examined in the interaction between the demand side and the supply side, that is, the interaction between the employers’ competence needs necessary for their operation and their experience regarding the preparedness of the fresh graduates.Journal of Economic Literature (JEL) codes: J23, J24, J53
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Has the monopoly in Hungarian telecommunication ceased?
126-146Views:11The article speaks about the natural monopolies of telecommunication, the regulation of competition and within this, the structure and regulation of the telecom industry, examining how this monopoly disappeared. It searches for answers in order to find out where the competitions stands in the Hungarian market and its place in the future. Professionals and consumers of the mainly liberal telecom market in Hungary, since 2001, are expecting that the new open towards international competing will cause greater proficiency and lower costs. In the beginning of the article, its author emphasizes the views in connection with the definition of competition and a form of the imperfect competition, natural monopoly; later speaking about the regulation of competition in general. In the third part of the article, she writes about the special regulations of the competitive telecom market, mentioning Hungarian experiences and showing the structure of the market.
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Development of the Russian securities market
56-74Views:94The Russian securities market, considered relatively modern, came about within a year or two in the first half of the nineties without any antecedents and tradition. Parallel to the formation of the institution system both the stock and the bond market underwent a rapid expansion, which continued steadily up to the outburst of the financial crisis in 1997/1998. The collapse in August and September 1998 was followed by a relatively long stabilization period, and later security prices began to increase again and bond prices also levelled off. The current paper analyses the last decade of the Russian securities market, introduces its phases, gives a detailed description of the road leading to the crisis and collapse examining the peculiarities in a comprehensive way.
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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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Market efficiency in relation to the financial crisis of 2008
31-50Views:351After the financial crisis of 2008 many scholars criticised the validity of the market efficiency hypothesis of the modern financial literature. The purpose of this paper is to investigate the adequacy of market efficiency based on Hungarian, and as a reference, on American securities. Besides classical statistical tools (autocorrelation function, Ljung-Box test, Augmented Dickey-Fuller test), we also used new approaches of the literature (Variance Ratio test). In addition to the simple hypothesis tests we tried to separate the different type of time series and explain the reasons for the different behaviours.
Journal of Economic Literature (JEL) codes: G140
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The Marketing Concept, Market Orientation and Marketing Competencies: How are they Adopted in Small and Medium-sized Firms?
104-117Views:121The aim of this paper is to review the literature dealing with the marketing concept, its implementation, i.e., market orientation, marketing competencies and their effects on performance with special emphasis on small and medium-sized enterprises (SME). A large number of studies have shown that, on the one hand, the lack of a conceptual marketing approach is one of the most serious problems owner-managers face in business operations and, on the other hand, marketing is recognised as one of the most important business activities essential to the survival and growth of the enterprise. According to the literature,
the adoption of the marketing concept/market orientation in SME-s is limited, due to limited resources in finance, time and marketing competencies.JEL classification: L26, M14, M31
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Price transmission on the Hungarian pork meat market in the presence of structural breaks
24-36Views:97The study of marketing margins and price transmission on various commodity markets has been a popular research topic of the past decades (see MEYER, VON CRAMON-TAUBADEL, 2004, for a present survey). However with a few exceptions these studies focused on developed economies. This paper examines the above phenomena on the Hungarian pork market. The Johansen (maximum likelihood, 1988) or Engle and Granger (two step, 1987) cointegration tests do not reject the no-cointegration null hypothesis between the Hungarian pork producer and retail price series. Therefore, we applied the Gregory and Hansen (1996) procedure with recursively estimated breakpoints and ADF statistics, and found that the prices are cointegrated with a structural break occurring in April 1996. Exogeneity tests reveal the causality running from producer to retail prices both in the long and short run. Homogeneity tests are rejected, suggesting mark-up pricing strategy. Price transmission modelling suggests that price transmission on the Hungarian pork meat market is symmetric in the long, but asymmetric in the short-run, i.e. processors, wholesalers or retailers might take temporary advantage, should price changes occur.
Journal of Econmic Literature (JEL) classification: Q13, D12, D4
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Analysis of the Competitiveness in the Agri-food sector: The case of Latin America and the Caribbean Region
92-117Views:195Latin America and the Caribbean (LAC) countries are among the global leaders in the production and exports of agricultural and fisheries commodities, accounting for 15% of the world’s average agri-food export from 1995 to 2019. With rising global market competitiveness, considering the agri-food sector, it is important to assess if the region can compete against other global rivals, and in what products. Accounting for regional potential economic power, remarkable agricultural food export and market expansion, this paper explored the LAC agricultural trade patterns and export competitiveness through the analysis of the Revealed Comparative Advantage (RCA) index, and its modifications - SRCA (Symmetric Revealed Comparative Advantage), RTA (Relative Trade Advantage, and RC (Revealed Competitiveness) - in the agricultural sector for the period of 1995-2019. This paper contributes to the literature by presenting the export characteristics in Latin American developing countries, which can be an important instrument for decision-makers in the agricultural trade policy. Throughout the research period, the results indicated that Brazil, Argentina, and Mexico were the TOP agri-food exporters in LAC. The highest RCA, SRCA, and RTA were found in Guatemala, whereas the greatest RC was found in Argentina. At the product level analysis, oil seeds and oleaginous fruits, miscellaneous grains, seeds and fruit, industrial or medicinal plants, and straw and fodder (HS12) were the most exported items at the 2-digit level. Fruit and nuts, edible; peel of citrus fruit or melons (HS08) had the most competitiveness in the worldwide market, with the highest SRCA and RC indices, whereas coffee, tea, mate, and spices (HS9) had the highest BRCA and RTA values. The evidence suggests that among the TOP 10 exporters in LAC, all indices in the global agri-food trade are said to be relatively stable, whereas survival rates do not persist over time.
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Freedom of the Markets versus Good Governance: Experiences in Central Europe
35-61Views:119The market and the state, operation and characteristics of two institutions of key importance in the modern mixed economies, are investigated for the former socialist countries in this study. After two decades it can be seen more clearly what system has been established in the region, how it operates, and what its characteristics are. In the first part of the with the help of international comparisons we examine how free the market is, how good the rules are, and how much they help, or hinder, the fulfilment of its function. From an other aspect we compare the scope of the good governance and the size, the freedom and efficiency of the state. According to the evidence of the international studies examined, the former socialist countries established the forms of the market institutional system relatively quickly, but the operation and quality of these lagged significantly behind those of the developed countries. Also important conclusion of the study is that by the first decade of the millennium the characteristics of the former socialist countries are increasingly diverging from one another. Both the characteristics of the earlier socialism, and the more distant historical past which can be caught in the act within it, had and have an effect on the economic and social systems now established in Eastern and Central Europe.
Journal of Economic Literature (JEL) codes: H1, P17, P27, P35
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Was there a stock market bubble in Hungary?
Views:209Bubble is one of the most frequently used and colorful terms in economics. However, it is rarely explained in detail, most economists more or less agree on what it means. In the following paper we are going to show that the widely accepted explanation of bubble contains controversial, tautological reasoning. It is challenged from the theoretical side, but practical consequences will also be mentioned. Two questions hiding in the title above will be answered. First is to give a conceptual framework for analyzing stock prices to decide whether we can label as a bubble particular movements, upward and downward tendencies in stock prices. Second, with a coherent and consistent definition we will be able to answer the question whether there was a bubble in the Hungarian stock market between 1995-2002.
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Business Intelligence from a Strategic Perspective
49-70Views:426Business Intelligence is one of the fastest growing sectors of corporate informatics today. The study describes the history of the related approaches, models and applications, starting from the beginning of the last century. The most important growth engines are highlighted and the strategic role of business intelligence is explained in detail. Both the supply and the demand side of the BI market are analysed and key developments and trends are explained. Special attention is paid to explaining and modelling the intensive acquisition activity of the recent past, and to the potential consequences of the growing need for integration. New market and technology trends changing the application landscape are analysed at the end.
Journal of Economic Literature (JEL) classification: M10, M15, M40
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Study the past as if you would define the future!? - Testing the effectiveness of technical analysis on the Budapest Stock Exchange
201-214Views:141Technical analysis is an attempt to forecast prices of a financial asset by the study of its past prices. This technique has been an element of financial practice for many decades, but it has not recieved general acceptance in academic literature. In this paper I analyze the effectiveness of certain technical trading rules on the Budapest Stoch Exchange between 1999 and 2005. In the first step I test if there are trading rules that can be qualified as effective when the analysis is applited to the full seven-year period. Some worries arise concerning the long-term analysis, so in the next step I test whether the effectiveness of the trading rules change if the analysis is applied to one-year sub-periods. The results indicate that it is worth implementing the short-term analysis because it shows a different picture of the effectiveness of the trading rules. However, the results of the short-term analysis show that if these trading rules are tested on one-year sub-periods, it becomes doubtful that they are effective.
Journal of Economic Literature (JEL) classification: G14, G15
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Attention in the world of information goods - an analysis of scarcity
1-20Views:143Attention as a form of service can also act as a source for the crearion of value. In its functional and market interconnections, attention is product of labour (product or service) and, as an exchangeable good, is naturally exchanged for money. The system of sxchange provides a significant amount of accurate information about the division of attention within society - the degree to which it reflects recognition by the individual and the community. The forum of exchange of attention can be viewed as the openness of society, while the internet is its international market place. However attention also played an important role in the 'old economy'; indeed in some cases attention was the central tool in its creation. Direct, personal services aimed at human beings (teaching, legal and health services) always demanded great attention. If nowadays a product itself is the main part of the service provided, attention becomes an important and decisive resource in the use of a product. The growing individualisation in the provision of goods and services, the increasingly direct interaction between people, and last, but not least, the transformation to a virtual level, necessarily increases the demand for attention in economic transactions- Unlike traditional goods, the outstanding feature of services, and more specifically intellectual goods, is the ability of consumers to devote sufficient time and attention to their use and to acquiring the necessary competence to use them. For the providers of these goods the ability to hold the attention of consumers/clients is often the crucial feature of competitive success. Praise, excellence and prestige are all manifestations of acquired attention. In this sense attention acts as a store of value, although it cannot be dircetly and easily compared with acquisition mechanism associated with money and other products. The economy of attention raises questions rather than offering defensible theses or clear statements. Even less does it allow us to claim that a theory could be crystallised in this field to explain how the expanding phenomenon of the non-material sector of the economy function in the economy as a whole. There is no doubt however that attention is a supremely important subject of research in the new economy.
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Are business relationships institutions?
Views:110The question is simple; the answer could be quite complicated. Inter-organisational marketing researchers define business relationships as interactive exchanges between two organisations. Does this mean anything for institutional economists? A business relationship is created by weaving actor bonds, resource ties and activity links. Business relationships exist and change through time. The establishment, development, maintenance, as well as termination of a business relationship all require investments from the participating parties. A business relationship does not exist in an isolated manner, but other market and non-market actors can equally influence it. In reality, numerous other relationships and actors affect business relationships. As a result, these actors indirectly influence business relationships through the change in behaviour of one of the parties within the business relationship. These directly and indirectly affected relationships create a business network. For an organisation business relationships have different functions. External resources needed
for operation and value creation are fed by them. Value creation for the customer and value sharing with the customer take place in business relationships. They are forms of an organisation’s interdependence. A business relationship is a special form of governance of the partners’ mutual efforts. A business relationship has its own value for each organisation. Each organisation has several business relationships, each with different value. In business markets,
where buyers are always organisations, the business relationship portfolio is the market itself. Inter-organisational marketing researchers use very different theoretical foundations to study business relationships. Modern contract law based research distinguishes about a dozen norms of behaviour in business relationships. Institutional economic-rooted studies argue that we should use the plural-forms approach (price, authority and trust must be employed together) to explain these very complex phenomena. Research using communication theory concluded that multiple periods of business negotiations were required to develop even primitive norms. The paper concludes with some elements of a possible answer to the title question. -
Reflections on the Role of Institutions on the Chinese Road to a Market Economy
49-82Views:101At the onset of transformation there has been a close to consensus view that the market system has no alternative. While this insight has found its place in the current mainstream on development economics, the so-called Washington consensus or post-Washington consensus (Kolodko, 2000, pp.119-141 andpp. 348-356; and Williamson, J, 2000, Srinivasan, T.N.,2000), very few would venture to repeat in an academic writing the once famous dictum of Vaclav Klaus: the third road leads to the third world. Much of western Europe has remained within the framework of the welfare state, despite its obvious limitations. Also in
the transforming economies, the rollback of the state has proven to be much less than the tough normative language adopted by early reformers would have indicated. Actually, it is the structure rather than the size of public spending in these countries that may be a source of social and economic strains by providing less than optimal conditions for sustaining economic growth. -
Equilibrium analysis of a semi-mixed duopoly – the production-in-advance case: Játékelméleti modell – a készletre történő termelés esete
63-74Views:116We investigate a mixed duopoly where, according to the ownership structure, a private firm and a partially public firm are present on the market of a homogeneous good. The private firm is assumed to be a pure profit maximizer, while the other firm maximizes social welfare in proportion to its state-owned shares. We assume that production takes place before sales are realized. After an introduction to some important results in the field of mixed duopolies, we determine the Nash equilibrium prices and quantities for all possible orderings of moves in the framework discussed. We show that a pure Nash equilibrium exists only if certain conditions are satisfied, and illustrate our findings through a numerical example. Furthermore, we determine the equilibrium of the timing game, i.e. we investigate whether a simultaneous or a sequential ordering of decisions would arise on the market, if the ordering of moves was an endogenous variable.
Journal of Economic Literature (JEL) Classifications: D43, L13
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Strategy and strategy formulation in Hungarian SME practice
19-32Views:176This study deals with the second phase of a two-year research program focused on modelling the lifcycle of small ventures operating in the Hungarian market. The results of the first phase were published in the March 2006 issue of Competitio. The goal of the second phase was to analyze the role of strategic thinking and strategy formulation at small ventures in different phases of ther lifecycles. The strategy making approaches as described by Henry Mintzberg and strategic positioning models of Micheal Porter were used to generate hypotheses. Strategy making practices and typical market maneuvers are described in detail. Key weaknesses and development problems are highlighted. Basic Business models built on srtategic behavior are recommended as a starting point for further research.
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Financial Crisis, Economic Policy and Economics
19-34Views:123Concerning the financial crisis in 2007-2009 many politicians and economists, in addition
to representatives of other disciplines have asked: why could it not have been avoided,
why could it not have been forecast? The present paper provides a new answer to these
questions. The main argument is that empirical economic policy reached a deadlock when
economists acknowledged the equilibrium models based on efficient market theory. The
static equilibrium paradigm which appeared in the middle of last century has strongly
prevailed to the present day, leaving aside Kornai’s (1971) or Benassy’s (1982) or Goodwin’s
(1991) warnings. Since the economy is never in equilibrium the simultaneous equations
describing it may not provide any guide for politicians; what they should do and how they
should do it in a time of economic crisis. The present author’s newest book (Móczár, 2008),
besides the dynamic equilibrium, also sketches a new paradigm, i.e., non equilibrium
modelling, instead of the orthodox equilibrium paradigm, which allows us to treat bubbles,
to regulate money markets etc. Its necessity is outlined here.JEL classification: E00, E5, E6, G28
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Policy (Institutional) Diversity and Economic Development
5-31Views:88Diversity, or variety, is the essence of economic life in the sense of underlying choice; economic calculation gives numerical substance to how people make choices in their daily endeavours, either as consumers or entrepreneurs. How does variety/diversity takes shape in the realm of institutions and policy making? Is the range of choices open-ended? The last couple of decades has revealed an overwhelming offensive of the neo-liberal paradigm in
terms of defining “best practices”. Even language was shaped accordingly with market reforms being seen in a quasi-single theoretical and policy framework. Are we heading towards increasing uniformity with regard to institutional and policy set ups, worldwide? An affirmative answer would underline the successful market based transformation of a series of command economies. Some convergence between institutional patterns in the USA and the
EU economies might be alluded to in the same vein A supportive argument for this line of reasoning could be that what matters for individual achievement, in the end, are equal opportunities. But this argument can be turned around when debating the merits of various institutional set ups in terms of creating fair chances for people. A sceptical answer would highlight the mounting challenges which confront societies, whether rich and poor, and the international community in general –in spite of the high hopes of not long ago. The demise of the “New Economy”, the series of corporate scandals in wealthy economies and the subsequent recourse to new regulatory legislation, recurrent financial and currency crises throughout the world, and the controversies surrounding the activity of IFIs, should compel “ideologues”, of all sorts, to be more humble in their prescriptions. This essay argues that there is substantial scope for institutional and policy diversity to operate as a means to foster economic development; that there might be a paradigmatic cycle in the dynamic of economic policies. -
Education and the linear education system from the employers' point of view
169-174Views:111Hungarian higher education gas travelled a long way since the political changes of 1989-90. We are entitled to ask whether the changes have followed the right path. Due to the complexity of the question there is no definite answer. In a short article just one important part can be emphasized. With my ideas I try to calibrate the employers' expectations of the students entering the labour market. The employers are the voracious actors in the market, who always have the right to be critical, and to have impossible expectations. In this situation employers are the customers, and therefore cannot be expected to deal with a multitude of questions themselves. In this essay I try to discuss various typical aspects of employers" excpectations of future employees.