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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.
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Hungary's dependence on external financing
145-156Views:77This paper demonstrates that Hungary has been dependent on external financing for several decades. In the 1970s and 1980s, debt was prevelant in the external capital structure of the Hungarian economy, but since the transformation to a market economy internation equity finance has reahced a level of capital accumulation and plays a very complex role in export potential, debt srvicing capacity and the modernization of the country. This paper argues that in general the forced increase in domestic demand is not able to substitute for the inherent need to realize export surplus in a small open economy in the long run. In the subsystem of the real economy there is a self-financing circuit driven by foreign direct investments which can meet the economy's current liabilities and profit remittance requirements, while this circuit cannot compensate for the consequences of the soft budgeting constraints of the general government.
JEL classification: H6, F4
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The Relevance of the Washington Consensus for the Post-communist Countries
5-25Views:217The Washington Consensus (WC) is 20 years old now. With hindsight, its main significance is the unification of the normative economics. Prior to the WC, it was widely accepted that different policies should be pursued in the developed and in the underdeveloped economies. It was a sheer coincidence that the emergence of WC occurred a few months before the collapse of the communist systems of Eastern Europe and the Soviet Union. Many scholars believe that the WC is responsible for the recurring economic crisis of the last two decades. I reject this view. A 200-year track record confirms that depressions and financial crisis have been always the intrinsic components of market economies – for the reasons identified by Marx and Schumpeter long time ago.
Journal of Economic Literature (JEL) classification: F02, F23, F41, P11, P36
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A reklámberuházások versenyre gyakorolt hatásának és gazdasági növekedéssel való összefüggéseinek vizsgálata
Views:114The 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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Methodological challanges of digitalization in business education: Digitalization in business education
62-83Views:380University education has to persevere in the 21st century in a changing environment. The knowledge that is to be obtained seems to increase with the advancement of technology. The development of science and the changing needs of the job market demand continuous development and more efficient university curricula. This article investigates the effect of technology on education efficiency; it describes and evaluates several teaching approaches. The conclusions tend to turn towards the direction that although obtaining information became considerably easier than even ten years ago, knowledge still has to be learned the same way as before. The neurobiological process of learning is the same as a hundred years ago.
Journal of Economic Literature (JEL) codes: A20, A22, A23
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Neumann's model and the cycles
14-19Views:103Neuman has created his model to verify the theoretical existence of balance. The assumptions of the model give an explanation to the existence of the cycles. They derive from two peculiarities of the model, which Neumann concludes from the operation of the market. The first peculiarity is that balance comes about in the so-called saddlepoint. It is characterized by maximum production and minimum profit. The second is crossregulation, where excess profit stimulates growth, whereas oversupply decreases prices.
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Issues of the Regulation of Residential Credits
44-51Views:179The 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 formation and development of employment law in the context of socio-economic processes
63-88Views:381The study explores the formation and development of the institutional system of employment law, in connection with socio-economic demands and economic, technical and technological developments. It demonstrates what factors play a role in the fact that the vast majority of companies, and the paternalistic working relationships that form within them, have been replaced by the patterns of big business and big business hierarchical culture. The study shows how the characteristic employment law framework of classical capitalism, which was emplyer-friendly and placed anti-social pressure on the interests of the employee, gave way to the philosophy of the social market and was influenced by the employee-friendly concepts of the welfare state. The article further analyses those social factors which in today's employment law system have once again started to subordinate the interests of the employee to those of the employer.
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The impact of digitalization on the financial sector
29-42Views:419Present-day consumer society increasingly satisfies its needs through digital channels, and financial products and services are no exceptions. The 4th industrial revolution is not only about the penetration of technology, but also the paradigm shift of business processes. The traditional members of the financial sector must adapt to the digitalized world to keep their positions in the market. The penetration of BigTech and FinTech companies influenced the expectations of consumers: customer experience became the main criteria of their decisions. In order to simplify and accelerate processes, banks use the methods of digitalization, and automatize the system to increase client satisfaction. In this article, we will introduce the three
bank types based primarily on the usage of innovative technology, the extension and depth of the cooperation with FinTech companies, and the status of a bank’s internal digital transformation. Also, we will introduce the current status of the banking sector evidenced by our SWOT-analysis and mention some of the existing payment solutions.
JEL Classification: G21, G23 -
Talent management in education: the war for talent
98-113Views:142The study analyses how J. Harsányi College became inoperable. J. Harsányi College is an organization that supports young talent at the Economics faculty of J. Selye University. The main object of the research is to help the relaunch of the organization and to raise the interest of the students in work and in the activity of the College. The research ask questions concerning studying, and how to improve the motivation and awareness of students. The author describes the theoretical background of talent management in the first part of the study, and then introduces her proposals on the basis of primary research.
Journal of Economic Literature (JEL) classifications: A29, M12
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The Rigidity of Labor Markets and the Unit Root in the Time Series of Unemployment rate: Raising a Problem
103-114Views:130The article is a review of the literature concerning the time series of the unemployment rate, and of the economic explanations behind the tests of these time series. We seek to identify the theoretical explanations behind a possible unit root in unemployment time series. We argue that the main difficulty faced by these unit root tests is the change in labor market institutions. The ffects of institutional changes make the traditional tests rather weak, while the panel unit root tests oversimplify the economics of the question. Our conclusion is that the possible application of the tests developed theoretically for nearly unit root processes seems to offer a way out of this dilemma.
Journal of Economic Literature (JEL) classifications: C22, E24
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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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Challenges ahead for the European Union
7-12Views:98It is a mild understatement that nowadays the EU is navigating in rough waters. Close to half of the member countries of the Euro area are in breach of their fiscal stability commitment – and some of them very substantially. Quite a few heads of government publicly criticise the ECB’s monetary policy. Germany and France are determined to water down the Bolkenstein directive on the implementation of a genuine single market for services (which amount to about two-thirds of the EU’s GDP), to which, incidentally, no major objections had been raised by the governments of the member states during the drafting stage. There is no agreement on the longer term EU budget. Only Ireland, the UK and Sweden accept the free movement of the residents of the ten countries which became members of the EU in May last year.
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Stabil párosítások a gyakorlatban: (Alvin E. Roth: Who Gets What – and Why. The New Economics of Matchmaking and Market Design. Houghton Mifflin Harcourt, New York, 2015, 260 oldal)
83-87Views:118A könyv szerzője, Alvin E. Roth, a Stanford Egyetemen professzora 2012-ben a stabil párosítások és a piactervezés területén elért eredményeiért Lloyd S. Shapley-vel közösen Nobel-emlékdíjat kapott. Míg Shapley-nek inkább elméleti munkája különleges, addig Roth a párosítások gyakorlati alkalmazásának terén alkotott igazán kiemelkedőt. Legújabb könyvének célja, hogy könnyed formában, közérthetően ismertesse meg az olvasót a piactervezéssel. Nem szakmabeliek számára is élvezetesen, történeteken, alkalmazásokon keresztül mutatja be eddigi munkáit, a könyv végére mégis olyan elméleti fogalmakkal is megismerkedünk, mint a Gale-Shapley algoritmus vagy a stabil párosítások. Ugyanakkor nagyon személyes könyv is, a szerző saját történeteivel színesíti a leírtakat. Megismerhetjük, hogyan vált elméleti szakemberből gyakorlati szakértővé, miként találkozott a megoldásra váró problémákkal, milyen szervezetek és miért kérték a segítségét, illetve fordítva, miként vette rá a döntéshozókat, hogy megfontolják a tanácsait. Szintén olvashatunk azokról a bürokratikus, politikai akadályokról, amelyek nehezítették a munkáját.
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Outward direct investment versus technology licensing: an SME perspective
55-70Views:123Based on the example of the evolution and internationalization of a Hungarian wastewater treatment company, this paper investigates various theoretical and strategic management issues. As for the
theoretical part, Hungary’s outward direct investment performance is analyzed departing from the thesis that Hungary’s present seemingly favorable OFDI performance is just a statistical artifact. It is
only organic development, based on local entrepreneurs’ capital export that can substantiate Hungary’s present OFDI position. The strategic management issues analyzed in the paper include the sequencing of internationalization; the pitfalls related to growth; modes of foreign market entry; and the choice between FDI-based internal exploitation of technological knowledge and external technology exploitation in the form of technology licensing.JEL codes: F23, L24, L26, O16, O33, Q57
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Role of the organizational factors in the success of Hungarian SMEs
108-125Views:686This paper analyses the success of the Hungarian SME sector from the aspect of competitiveness, innovation, organizational background and the role of the leader/owner. The author summarizes the organizational innovation specialties of the SMEs based on four empirical researches and own case-study. The conclusion is the organizational innovation characteristically fades into the background of SME operation, development purposes and strategy. The role of the firm owner-leader is essential in these topics. Meanwhile the inflexibility of the organization, loyalty of the employees, labor market disadvantages, the knowledge level and competency of the human resources, its effect on the efficiency are often limit the expansion. These factors have significant influence on the success and competitiveness of the company. Therefore, the paper analyses the organizational innovation and background according to the company success, and the leader-based decision-making procedures, and processes, and evaluates the results of secondary research based on these. The novelty of the empirical research method is the search for GAPs between the leader and the organization and their correlation with success and attitude towards innovation.
Journal of Economic Literature (JEL) codes: M14
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The use of logical programming in decision-making systems
105-113Views:13The strong market in teh globalized economy makes fast, quality responses important. In the accelerated world time for reaction has been decreased, so to say there is less time for response, on the other handm the problems have become more complex and the information needed to make the decision has grown. In this environment computational-response programs have gained an important role. This article shows the opportunities of logical programming and its use and advantages in economic modelling and decision-making systems.
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Financial decisions and the knowledge illusion
1-9Views:256The author deals with those influential factors of behaviour that arise from the phenomenon of knowledge illusion originating from over-confidence. It rises from the constantly recurring fault of information process. In order to demonstrate knowledge illusion, the author takes examples from special literature, from another aspect the result is shown on the basis of questionnaires filled in by university students. He draws the conclusion that in the case of financial decisions, knowledge illusion usually makes an impression on the participants" market activity. According to this assumption knowledge illusion is one of the important and not negligible factors of financial decision-making and analysis.
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The future of Russian outward foreign direct investment and the eclectic paradigm: What changes after the crisis of 2008–2009?
31-54Views:146This article explores the future of Russian outward foreign direct investment in the aftermath of the crisis of 2008–2009. As it is too early to analyse the full impact of the crisis, it develops hypotheses about the degree of slowdown in the foreign expansion of Russian transnational corporations. It uses an extension of the eclectic paradigm to home country advantages (competitive environment, business environment, development strategy, State involvement) applied to a comparison of the Russian Federation with other economies in transition as an analytical tool. Systematic differences between transnationals from the Russian Federation (global firms, based on natural resources, aiming for vertical integration of assets) and from new European Union member countries (regional firms, based on downstream activities or services, aiming for horizontal integration) allow us to formulate more solid conclusions about the future of the Russian firms facing lower export prices, lower market capitalizations and higher debts. In turn, this article argue that a comparison with the large emerging economies of Brazil, China and India, under the acronym of BRIC can be less useful in the current context, as these economies are significantly less affected by the crisis of 2008–2009 than the Russian Federation; hence they can not expect a slowdown in their outward foreign direct investment similar to that of Russian transnationals.
JEL: F23; F21; O52; P29
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Knowledge Export in Higher Education: A Hierarchic Approach
35-48Views:137The role of higher education in economic growth is increasing parallel with the development of the knowledge industry. The export income from student mobility estimated by some experts exceeds 40 billion US dollars worldwide. In this paper we discuss two aspects of the phenomenon. First, higher education as an industry is more complex than simply student mobility. This is true despite the fact that this mobility is the most visible and most attractive part of the export activity. There are research outputs of universities and other service activities which are classified as exports and which are offered in market based systems. Second, the individual professors - whether employees of universities or freelance knowledge workers - university departments, faculties, universities, countries, regions, etc. could serve as the subjects of the statistical measurement of activities. All of those activities which are carried out by universities can be measured in different hierarchical systems.
Journal of Economic Literature (JEL) classification: F14, M31
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Some economic aspects of higher education quality
14-30Views:292Based on the world's most renowned university rankings, OECD annual reports and Eurostat data, this paper seeks to demonstrate that a competitive economy requires competitive (higher) education and that there is a significant correlation between the quality of higher education and economic development. Furthermore, in this process, the higher education quality assurance organization system has an outstanding task and responsibility through the formation of quality culture, guidelines, helpful research, summary of good practices and making constructive suggestions. Finally, it points out that close collaboration between universities and agencies with stakeholders is a priority area, which could contribute to a much more capability-based output system in the longer term. It also considers it desirable to make the relationship between universities and scientific research networks and research institutes closer and more vibrant (where it is not).
Journal of Economic Literature (JEL) codes: H52, I22, I23, I25, I26, O15