Economic Growth In Hungary Research Articles

Innovation-Driven Enterprises in Hungary: Empirical Results at First Sight

This study examines the issue of the middle-income trap in the Hungarian economy and the possibilities for escaping it, given the end of the period of extensive growth and the need for a new growth model. Innovative companies, especially SMEs, have a key role to play in this transformation, as they can differentiate themselves in the market and achieve international success. Our research analyses business capabilities that contribute to gazelle-like growth and export market competitiveness. Adapting the experience gained from the MIT REAP programme to the Hungarian context, we examine the importance and characteristics of Hungarian innovation-driven enterprises. The study highlights the importance of developing financial, technological and human resources, and the need to create a favourable market and regulatory environment. To increase the number of HIDE enterprises and promote sustainable economic growth in Hungary, it is crucial to understand their operation and impact in more depth, which necessitates further research.

Drivers of Regional Economic Growth in Hungary before and during the Pandemic Crisis

Abstract The 2010s saw a gradual improvement in economic growth in Hungary, which was noticeable in all regions. In this research, we examine the post-crisis economic development trends in a NUTS 3 level disaggregation in the context of the dependent market economy model. The research uses descriptive and multivariate statistical analysis to shed light on the main regional trends. Notable changes occurred mainly in the top and middle performing counties in terms of output, while the bottom of the ranking was characterized by stagnation. Territorial disparities have temporarily narrowed, but there has been no significant catching up of lagging regions.

An overview of greenhouse gases emissions in Hungary

In Hungary, successive steps have been taken toward adjusting GHG emissions from all sectors on a national scale. However, few studies were carried out to analyze the environmental dimensions of GHG emissions from an economic point of view. In this research, the contemporary changes of GHG emissions between 1985 and 2018 were analyzed using the Mann-Kendall test (M-K test); along with the interaction between GHG emissions and economic growth by applying the environmental Kuznets curve (EKC). Results showed that the industrial sector has been the main source of CO2-emitting, and contributed 72% of the total emissions. Meanwhile, the biggest CH4-emitting sector was the waste sector (44%), followed by the agricultural sector (39%). Nonetheless, the agricultural sector was responsible for more than 65% of N2O emissions over Hungary. The M-K test results showed that total CO2 emissions were reduced significantly (p < 0.05) by −1001 thousand tonnes/year. Similarly, the total N2O emissions were subject to a significant decrease (p < 0.05) of −0.31 thousand tonnes/year. Interestingly, the long-run positive significant coefficient on income growth (GDP), and negative significance on (GDP)2 indicate EKC's existence for CO2 emission, CH4, and N2O in Hungary, revealing that GHG emissions will increase at a decreasing rate with economic growth in Hungary. The output of this research is useful for decision-makers to consider the environmental dimensions of GHG emissions and set priorities for minimizing emissions by sectors.

How Effective are School Years? : Examining the Link Between Human Capital and Economic Growth in European Countries, 2014-2019

This paper wishes to contribute to the examination of the relationship between human capital and economic growth. Human capital is measured by the average number of finished schooling years and its effect on economic growth is estimated on novel data in European countries. Data from the period between 2014 and 2019 show a negative coefficient for schooling years. In eastern countries in the analysis economic growth is generally higher than in Western-European countries. Economic growth in Hungary is higher than the estimated value explained by the analysed variables. The negative coefficient means that human capital measured by the number of schooling years does not accelerate economic growth any more, and further reforms of the education systems are needed in order to use human capital more efficiently.

NONLINEAR ADJUSTMENTS IN THE EXPORT-LED GROWTH HYPOTHESIS: RE-EXAMINING THE HUNGARIAN CASE

This paper aims to examine the non-linear adjustments between exports and gross domestic product (GDP) in Hungary. In order to test the export-led growth hypothesis in the Hungarian economy this research analyses data from 1996Q1-2016Q4. Applying relatively novel approach to export-led growth hypothesis likely nonlinear asymmetric effect of exports and GDP toward their long-run equilibrium is tested. The results disclose a threshold cointegrating connection between the selected variables providing more insights into export led growth hypothesis. Unlike previous studies, research results reveal unidirectional and bidirectional causality in the long-run Hungarian exports-growth nexus which depends on the regime process with significantly different error correction adjustments in normal and stress regimes. Exports is found to be an engine of economic growth in Hungary for entire period but in times of stress when domestic demand contracts the role of exports in economic growth becomes more prominent and takes the basic form of export led growth hypothesis. Empirical results in this paper clearly points that threshold cointegration approach offers deeper insights than the linear error-correction model and might be the proper model specification to examine export led growth hypothesis.

Foreign Direct Investment Dynamics in Hungary

The study discussed the dynamics of FDI in Hungary during the period from 1991 to 2015. The impact of FDI, FDI trends and determinants of FDI in Hungary were discussed. Empirical literature observed that FDI positively influenced economic growth in Hungary through boosting human capital development levels, total factor productivity, economic transformation, innovation, research and development, additional capital in the economy, modern technology, increased volume of additional capital and technology transfer. The study also revealed that most of the net FDI inflow into Hungary originated from developed countries and the least FDI net inflow came from transitional economies during the period under study. The general trend of FDI net inflow into Hungary followed a mixed pattern, with some years experiencing a positive net FDI inflow whilst other years were characterised by negative net FDI inflows. What is clear however is that FDI net inflow was consistently positive and experienced a positive growth following the integration of Hungary into the EU bloc of countries? The accession of Hungary into the EU removed barriers for the movement of capital, people, goods and services within the EU, reduced the cost of doing business and improved trade openness. These are the key locational advantages of FDI which improved FDI inflow into Hungary for a sustained period of time after the EU accession. The study also empirically tested the determinants of FDI in Hungary using the OLS multiple regression model with data ranging from 1991 to 2015. In contradiction to most previous studies on the subject matter, trade openness and financial development were found to have had a negative influence on FDI. The study also observed that inflation had a positive influence on FDI, contrary to Sayek (2009) who revealed that higher inflation levels erodes the foreign investors’ profits, thereby making the host country not an attractive investment destination. However, exchange rate, education and economic growth had a positive but non-significant impact on FDI in Hungary, consistent to both theoretical and empirical literature. The implication of the study is that the Hungarian authorities are urged to design and implement policies aimed at improving education and economic growth in order to attract more FDI. Practical steps need to be taken by the Hungarian authorities in making sure that the value of the local currency is not overvalued and that trade openness is controlled and managed so that it does not reach a point where it begins to negatively affect FDI inflows.

Scaling up innovation: does research and development have a role to play in economic growth? A case of Hungary

The study investigated the impact of research and development expenditure on economic growth in Hungary using annual time series data ranging between 1996 and 2013. Abundant literature is available which shows that research and development expenditure leads to the improvement in economic growth. However, such studies in the case of Hungary are quite scant. The Johansen and Juselius' (1990) cointegration test noted that there exists a long run relationship between research and development and economic growth in Hungary. Moreover, economic growth was found to have been Granger caused by research and development expenditure in Hungary both in the short and long run, in support of the literature. The study, therefore, urges the Hungarian policy makers to craft and implement action plans that boost research and development expenditure in order to enhance economic growth in Hungary.

Risks and challenges to international and Hungarian econo-my in the middle of the decade

In 2015, economic growth in Hungary despite of some slowdown remained still dynamic, whilst global growth continued to be slow with new short- and medium term downside risks. The study gives an overview of the international economic and market trends having influence on economic development in Hungary with a special focus on events and problems in the euro area and in the Central-East-European region. It also addresses the macroeconomic and financial processes in Hungary in the course of the last year.

Financial development and growth in Hungary

This study investigated the relationship between financial development and economic growth in Hungary using a case study approach. Majority of previous studies on the same or similar topic have so far used regression and or econometric methodologies to examine the nature of the relationship between financial development and economic growth. Not a single study the author is aware of used a case study approach to discuss the relationship between the two variables. It is against this background that the author decided to use the case study approach that allows the author to really deepen an understanding of the relationship between the two variables in Hungary. Apart from being narrowly focused on regression or econometric approaches, previous studies on the same or similar topic in Hungary excluded a broad range of financial development variables. The current study departs from these previous studies as it used a case study approach and taken into account a broad range of financial development variables. From the trend analysis done in section 3, it appears that the relationship between financial development and growth in Hungary during the period under study is not clear. A definite and clear cut conclusion could not be reached about the relationship between the two variables in Hungary hence the use of econometric data analysis approaches in conjuction with the case study approach is recommended.

Regional economic growth in Hungary 1998–2005: What does really matter in clusters?

Although industry clusters are major targets of regional economic development in less developed regions as well, we still need a deeper understanding of how the spatial clustering of firms generates dynamics in lagging regions. These latter environments may differ from the typical cluster policy examples that are usually specialised global centres of dynamically growing industries. Using census-type data of Hungarian firms, we test the effect of major cluster indicators — regional specialisation and spatial concentration of industries — and the impact of FDI on regional productivity and employment growth in Hungary. Our results suggest that regional specialisation does not affect regional growth, while the spatial concentration of industries is found to influence productivity and employment growth with an overwhelmingly negative effect. Furthermore, regional employment growth is associated negatively with the initial level of regional specialisation. Results suggest that Hungary has evolved into a dual economy in which previously specialised regions and geographically concentrated industries have lost their pace, while the main factor that favoured regional economic growth was the presence of large foreign companies. Therefore, economic policies fostering regional specialisation and the spatial concentration of industries — such as cluster policy — may have minor effects unless the interaction of foreign-owned and domestic companies is encouraged.

The Determinants of Economic Growth in Hungary, Poland, Slovakia and the Czech Republic During the Years 1995-2010

The main goal of the research is to obtain a comprehensive examination of the economic growth determinants in Hungary, Poland, Slovakia and the Czech Republic (CEEC-4) since 1995. For this purpose, two methodological approaches have been applied: the Solow growth accounting and the non-parametric approach. At the beginning of the analysis, in order to obtain a general overview of the sources of economic growth in the former transition countries of Central Eastern Europe, the Solow growth accounting has been conducted. It decomposes the growth rate of output into contributions from changes in the quantity of the physical capital stock, the amount of labour input and some other unexplained factor commonly interpreted as reflecting technological progress and called the “Solow residual” or “Total Factor Productivity (TFP)”. The hypothesis that technological progress together with strong capital accumulation were the dominant factors behind the economic growth and convergence process in the Central Eastern European countries before the crisis is tested. As the Solow growth accounting does not reveal the driving forces behind the technological progress and, thus, a large part of the growth decomposition remains unexplained in the transition economies, the non-parametric approach has been employed to shed more light on the ultimate sources of economic growth in the CEEC-4. The non-parametric (production-frontier) method enables the further decomposition of changes in total factor productivity into changes in the efficiency of production and technological changes. Furthermore, it allows accounting for human capital accumulation, since improvements in quality of labour are also reflected in TFP growth.

Regional Economic Growth in Hungary 1998-2005: What Does Really Matter in Clusters?

Although industry clusters are major targets of regional economic development in less developed regions as well, we still need a deeper understanding on how spatial clustering of firms generates dynamics in lagging regions. These latter environments may differ too much from those typical cluster policy examples that are usually very specialized global centres of dynamically growing industries. Using census-type data of Hungarian firms, we test the effect of major cluster indicators – regional specialization and spatial concentration of industries – and the effect of FDI on regional productivity and employment growth in Hungary. Our results suggest that regional specialization does not affect regional growth but spatial concentration of industries is found to influence productivity and employment growth with an overwhelmingly negative effect. Furthermore, regional employment growth is associated negatively with the initial level of regional specialization. We argue that Hungary has evolved into a dual economy; in which previously specialized regions and geographically concentrated industries have lost their pace. The main factor that favoured regional economic growth was the presence of large foreign companies. Therefore, economic policies fostering regional specialization and spatial concentration of industries – such as cluster policy – may have minor effects only if the interaction of foreign-owned and domestic companies is not fostered.

Hungary: Staff Report for the 2011 Article IV Consultation and Second Post-Program Monitoring Discussions

This 2011 Article IV Consultation highlights that economic growth in Hungary is slowing and market perception of recent policy measures has been negative. The eurozone crisis is weighing on Hungary’s external demand. Fiscal and monetary policies are facing constraints, given financial market pressures and inflationary pressures. Executive Directors have noted that the rebound from the crisis has been modest and vulnerabilities remain high. Directors have therefore underscored the need for a well-crafted policy mix that restores confidence in economic governance, anchors the ongoing adjustment, and strengthens economic institutions.

Capital accumulation and growth in Hungary, 1924–2006

The objective of this paper is to analyse the role of both human and physical capital in economic growth in Hungary during the 20thcentury by extending the already available data on physical and human capital. Besides the standard measure for the volume of human capital, we develop a simple method to estimate the value of the human capital stock in Hungary between 1924 and 2006. While the volume index slowly grows over time, the value of human capital shows a decline during the late socialist period. Applying the value of human capital in a growth accounting analysis, we find that the Solow residual has no long-run effect on economic growth anymore.

Factors and problems of economic growth in Hungary, Russia and Serbia

The paper presents an analysis of the main characteristics of growth mechanism in three transitional economies - Hungary, Russia and Serbia. The author searches for an answer to the question what fundamental factors, internal and international, determined the long-term growth of the national economies in these countries from the early 1960s to the present global crisis. Wherever it was possible, he made comparisons between the pretransition and transition periods. Applying the models of mathematical economics, the author carried out an econometric investigation to prove his hypothesis on the system effect of market reforms. He pointed out that market reforms, which were implemented consequently and combined with a growth-oriented economic policy, could substantially contribute to the attainment of better performance.

A method for the analysis of interrelationships between mutually connected events: A cross-impact method

A cross-impact method is developed and adapted to the Socialist planning system, specifically economic growth in Hungary. The method makes it possible to estimate probabilities of occurence of interrelated events, to investigate the chains of effects of such events, and to minimize inconsistencies.

THE EFFICIENCY OF REAL AND HUMAN RESOURCES IN HUNGARIAN INDUSTRY

The author attributes economic growth in Hungary to three factors: structural change, increase of employment, and productivity. On the basis of this he points out that in the 1950's the first two factors were responsible for nearly half of the economic growth. From the 1960's this tendency has changed; more and more importance has been taken by the increase of productivity. As the main source of economic growth is the increase of industrial productivity, in the further part of the study the author makes an attempt to break down the development of Hungarian industry into its components and to analyse their efficiency. Starting from the present conditions of industrial development he investigates what further increase of industry the resources accumulated till now and their probable growth will allow in the future.Taking into account the role of material and human resources the author draws the following conclusions.Industrial production will increase in the future at the same rate as productivity.The increase of industrial investment will probably be lessened, which postulates the greater increase of capital productivity as well as that productivity will increase at a higher rate than the capital‐labour ratio.These conclusions assume an increase in the efficiency of industrial investment and an above average increase in the high‐productivity branches.A further source of increasing productivity is accumulated human capital. The higher educational level is one of the guarantees for the ever‐increasing role of productivity in economic growth in the future.

Sources of Economic Growth in Hungary, 1967-1972

Sources of Economic Growth in Hungary, 1967-1972