Acta Oeconomica
Volume/Issue:
Volume 55: Issue 2
Physical capital stock, technological upgrading and modernisation in Hungary
Author: Andrea Szalavetz 1
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  • 1 Institute for World Economics of the Hungarian Academy of Sciences H-1014 Budapest, Országház u. 30, Hungary
DOI:
https://doi.org/10.1556/aoecon.55.2005.2.4
Page Count:
201–221
Publication Date:
01 Jul 2005
Online Publication Date:
05 Aug 2005
Article Category:
Research Article
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This paper discusses the relation between the quality and quantity indicators of physical capital and modernisation. While international academic literature emphasises the role of intangible factors enabling technology generation and absorption rather than that of physical capital accumulation, this paper argues that the quantity and quality of physical capital are important modernisation factors, particularly in the case of small, undercapitalised countries that recently integrated into the world economy. The paper shows that in Hungary, as opposed to developed countries, the technological upgrading of capital assets was not necessarily accompanied by the upgrading of human capital i.e. the thesis of capital skill complementarity did not apply to the first decade of transformation and capital accumulation in Hungary. Finally, the paper shows that there are large differences between the average technological levels of individual industries. The dualism of the Hungarian economy, which is also manifest in terms of differences in the size of individual industries' technological gaps, is a disadvantage from the point of view of competitiveness. The increasing differences in the size of the technological gaps can be explained not only with industry-specific factors, but also with the weakness of technology and regional development policies, as well as with institutional deficiencies.

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Cover Acta Oeconomica
Acta Oeconomica Periodical of the Hungarian Academy of Sciences
Print ISSN:
0001-6373
Online ISSN:
1588-2659
Keywords:
capital accumulation; capital accumulation; capital-skill complementarity

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