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• Trust as a Cost Reducing Factor

  74-84

  Anett Hodosi

  Views:

  205

  The current study analyzes the cost reducing feature of one of the well-researched informal institutions, trust. The micro level analysis is followed by a macro level approach, which is aimed at highlighting trust’s direct cost reducing element via transaction costs and its indirect effect through the legal system. As part of the latter an empirical evaluation of 25 European Union countries has been carried out regarding the connection between costs due to administrative burden and trust. On the one hand academic economic literature proves that trust reduces transaction costs, and on the other hand that the effectiveness of the legal system contributes to the decrease of transaction costs. According to our assumption the increase of the level of trust improves the effectiveness of the legal system and via this
  mechanism it supports the reduction of transaction costs.

  JEL classification: D02, E02

• A critical analysis of dependent companies with partnerships and the legal position of their directors

  101-110

  Emese Toro

  Views:

  88

  In the author's opinion the Hungarian legal system does not at present adequately deal with the special nature in Trust Law of those companies and their directors associated with and dependent on partnerships. These companies, legally independent, but economically connected to partnerships are required to push their own interests into the background in order to achieve common business goals. In the case of real groups of companies regulated by the Companies Act of 1997 only influence gained directly in relation to the given share owned in the partnership is considered relevant. Other formulation of this determining influence are not accompanied by requirement for excess liabilities and the law does not provide for arrangements to protect the interest of small owners and creditors. Accordingly it is the dominant influence that counts and not whether the directing influence is based on the size of the voting rights of the prevailing members or the contract established with the members ie. the shareholders.