Sustainability of the Hungarian Social Cooperatives

Abstract

AbstractIn 2016, the Hungarian Government launched a new subsidiary programme to promote the establishment and operation of social cooperatives—called Focus programme. This paper examines the financial sustainability of Hungarian social cooperatives based on the financial report of 2961 entities. The key question was how effectively they used the state subsidies to reach a financial sustainable status. Three major subsidisation programmes were analysed. By our results, the effectiveness of the programmes proved better during the time, however the effectiveness inside the framework of the unique programmes decreased, which indicated a serious dilution of the late applicants. Considering the sectorial distribution of the surviving social cooperatives, some industrial sectors like Metallurgy, Building materials manufacturing, Roofing, Toy manufacturing, Building industry proved to be the most successful while the most populated sectors like agriculture, retail trade, communal activities are more likely ceased to exist after the maturity of the applications. Some financial ratios were tested to predict the sustainability of a social cooperative and the discriminant analysis was used to highlight the importance of these ratios. The result of the analysis was that the Operational Sustainability has got far better predictive nature than the rest ones.KeywordsSocial economySocial cooperativesSustainabilityRatio analysisControllingSustainability