View More View Less
  • 1 University of Pécs Pécs Hungary
  • | 2 Hungarian Academy of Sciences Budapest Hungary
Restricted access

This article comprises an examination of the basic macroeconomic capital structure from a corporate stand-point — based on capital structure theories and on an analytical framework of corporate finance. The ‘Trade-off Theory’ employed at the macro-level can be compared to the choice between the consumption-smoothing effect of external debt and the risk of bankruptcy, whilst the ‘Hierarchy Theory’ can be applied to the ‘pecking order’ of global capital flows. The ‘Free Cash Flow Theory’ emphasises the disciplining effect of external debt, significance of which has become more evident with the credit crisis and the IMF’s loan-package to Hungary. The macroeconomic capital structure shows that in respect to international investment, the debt-to-GDP ratio has been growing more rapidly over the last ten years, and due to the level of indebtedness, the conditions essential for sustainable development cannot survive. The authors attempt to show that this is the reason why an unbridgeable efficiency gap has appeared in the employment of external capital. Although domestic economic policy-makers are sure of their long-term ability to manage the ever-increasing external debt, it would be a mistake to overlook those macroeconomic anomalies which have brought about the widening of the efficiency gap.

  • Albuquerque, Rui (2003): The Composition of International Capital Flows: Risk-sharing through Foreign Direct Investment. Journal of International Economics 61(2): 353–383.

    Albuquerque R. , 'The Composition of International Capital Flows: Risk-sharing through Foreign Direct Investment ' (2003 ) 61 Journal of International Economics : 353 -383.

    • Search Google Scholar
  • Antal, Judit (2006): Külső adósságdinamika [Exterior Debt Dynamics]. MNB-tanulmányok 51, Budapest.

  • Antal, László (2003): Fenntartható-e a fenntartható növekedés? [Is Sustainable Growth Sustainable?] Budapest: Közgazdasági Szemle Alapítvány.

    Antal L. , '', in Fenntartható-e a fenntartható növekedés? , (2003 ) -.

  • Antalóczy, Katalin — Sass, Magdolna (2000): Működőtőke áramlások, befektetői motivációk és befektetés-ösztönzés a világgazdaságban és Magyarországon [FDI Flows, Investor Motivations and Investment Promotion in the World Economy and Hungary]. Közgazdasági Szemle 47(5): 473–496.

    Sass M. , 'Működőtőke áramlások, befektetői motivációk és befektetés-ösztönzés a világgazdaságban és Magyarországon ' (2000 ) 47 Közgazdasági Szemle : 473 -496.

    • Search Google Scholar
  • Antalóczy, Katalin — Sass, Magdolna (2003): Működőtőke-befektetések és a külkereskedelem modernizációja: nemzetközi kitekintés és hazai tapasztalatok [FDI and the Modernization of Foreign Trade]. Külgazdaság 47(12): 4–36.

    Sass M. , 'Működőtőke-befektetések és a külkereskedelem modernizációja: nemzetközi kitekintés és hazai tapasztalatok ' (2003 ) 47 Külgazdaság : 4 -36.

    • Search Google Scholar
  • Antalóczy, Katalin — Sass, Magdolna (2005): A külföldi működőtőke-befektetések regionális elhelyezkedése és gazdasági hatásai Magyarországon [Regional Distribution and Economic Effects of FDI in Hungary]. Közgazdasági Szemle 52: 494–520.

    Sass M. , 'A külföldi működőtőke-befektetések regionális elhelyezkedése és gazdasági hatásai Magyarországon ' (2005 ) 52 Közgazdasági Szemle : 494 -520.

    • Search Google Scholar
  • Cole, Harold L. — English, William B. (1991): Expropriation and Direct Investment. Journal of International Economics 30: 201–227.

    English W. B. , 'Expropriation and Direct Investment ' (1991 ) 30 Journal of International Economics : 201 -227.

    • Search Google Scholar
  • Cole, Harold L. — Kehoe, Patrick J. (1995): The Role of Institutions in Repudiation Models of Sovereign Debt. Journal of Monetary Economics 35(1): 45–64.

    Kehoe P. J. , 'The Role of Institutions in Repudiation Models of Sovereign Debt ' (1995 ) 35 Journal of Monetary Economics : 45 -64.

    • Search Google Scholar
  • Eichengreen, Barry — Fishlow, Albert (1998): Contending with Capital Flows: What is Different about the 1990’s? Cornell University Press.

  • Eichengreen, Barry — Hausmann, Ricardo (1999): Exchange Rates and Financial Fragility. NBER Working Papers No. 7418.

  • Éltető, Andrea (1998): The Economic Performance of Firms with Foreign Investment in Hungary. Institute for World Economics Working Paper No. 94.

  • Evrensel, Ayşe, Y. (2004): Lending to Developing Countries Revisited: Changing Nature of Lenders and Payment Problems. Economic Systems 28(3): 235–256.

    Evrensel A. Y. , 'Lending to Developing Countries Revisited: Changing Nature of Lenders and Payment Problems ' (2004 ) 28 Economic Systems : 235 -256.

    • Search Google Scholar
  • Faria, André — Mauro, Paolo (2004): Institutions and the External Capital Structure of Countries. IMF Working Paper No. 04/236.

  • Faria, André — Lane, Philip R. — Mauro, Paolo — Milesi-Ferretti, Gian Maria (2007): The Shifting Composition of External Liabilities. Journal of the European Economic Association 5(2–3): 480–490.

    Milesi-Ferretti G. M. , 'The Shifting Composition of External Liabilities ' (2007 ) 5 Journal of the European Economic Association : 480 -490.

    • Search Google Scholar
  • Garrison, Roger W. (2001): Time and Money: The Macro-economics of Capital Structure . London: Routledge.

    Garrison R. W. , '', in Time and Money: The Macro-economics of Capital Structure , (2001 ) -.

  • Hamar, Judit (2001): A külföldi és a hazai tőkével működő vállalatok szerepe a magyar iparban [The Role of FDI and Domestic Capital Firms in Hungarian Industry]. Külgazdaság 45(4): 4–34.

    Hamar J. , 'A külföldi és a hazai tőkével működő vállalatok szerepe a magyar iparban ' (2001 ) 45 Külgazdaság : 4 -34.

    • Search Google Scholar
  • Harris, Milton — Raviv, Artur (1991): The Theory of Capital Structure. Journal of Finance 46(1): 297–355.

    Raviv A. , 'The Theory of Capital Structure ' (1991 ) 46 Journal of Finance : 297 -355.

  • Hayek, Friedrich A. ([1935] 1967): Prices and Production . New York: Augustus M. Kelley.

    Hayek F. A. , '', in Prices and Production , (1967 ) -.

  • Huizinga, Harry — Laeven, Luc — Nicodeme, Gaetan (2007): Capital Structure and International Debt Shifting. IMF Working Paper No. 07/39

  • Hunya, Gábor (2000): Home Country Patterns of Foreign Direct Investment in Central and East European Countries. Russian and East European Finance and Trade 36(2): 87–104.

    Hunya G. , 'Home Country Patterns of Foreign Direct Investment in Central and East European Countries ' (2000 ) 36 Russian and East European Finance and Trade : 87 -104.

    • Search Google Scholar
  • Huszti, Ernő (2008): Néhány gondolat a külső adósságállományról. Az elmulasztott lehetőségekről és az adósság reálértékének alakulásáról [Thoughts on External Debt. Missed Chances and the Real Value of Debt]. Unpublished manuscript.

  • Iwasaki, Ichiro (2005): Foreign Direct Investment and Corporate Restructuring in Hungary. In: Corporate Governance in Transition Economies, Part 2, The Case of Hungary. Discussion Paper Series, Institute of Economic Research, Hitotsubashi University . Tokyo: Hitotsubashi University pp. 21–58.

    Iwasaki I. , '', in Corporate Governance in Transition Economies, Part 2, The Case of Hungary , (2005 ) -.

  • Jensen, Michael G. — Meckling, William H. (1976): Theory of the Firm: Managerial Behavior Agency Costs and Ownership Structure. Journal of Financial Economics 3(4): 305–360.

    Meckling W. H. , 'Theory of the Firm: Managerial Behavior Agency Costs and Ownership Structure ' (1976 ) 3 Journal of Financial Economics : 305 -360.

    • Search Google Scholar
  • Kalotay, Kálmán (2003): Működőtőke — válságban? [FDI — In Crisis?] Közgazdasági Szemle 50: 35–55.

    Kalotay K. , 'Működőtőke — válságban? ' (2003 ) 50 Közgazdasági Szemle : 35 -55.

  • Komáromi, András (2008): A külső forrásbevonás szerkezete: Kell-e félnünk az adóssággal való finanszírozástól? [The Structure of Debt Financing. Should We Fear It?] MNB Szemle 2008(4): 14–22.

    Komáromi A. , 'A külső forrásbevonás szerkezete: Kell-e félnünk az adóssággal való finanszírozástól? ' (2008 ) 2008 MNB Szemle : 14 -22.

    • Search Google Scholar
  • Kornai, János (1995): Négy jellegzetesség. A magyar fejlődés politikai gazdaságtani megközelítésben I [Four Characteristics. A Political Economy Approach to Hungary’s Development]. Közgazdasági Szemle 47(12): 1097–1117.

    Kornai J. , 'Négy jellegzetesség. A magyar fejlődés politikai gazdaságtani megközelítésben I ' (1995 ) 47 Közgazdasági Szemle : 1097 -1117.

    • Search Google Scholar
  • Lane, Philip R. — Milesi-Ferretti, Gian Maria (2000): External Capital Structure: Theory and Evidence. IMF Working Paper WP/00/152.

  • Lane, Philip R. — Milesi-Ferretti, Gian Maria (2006): Capital Flows to Central and Eastern Europe. IMF Working Paper WP/05/213.

  • Mészáros, Ádám (2004): A magyarországi közvetlen külföldi működőtőke-beruházások exportenklávé jellege [The Enclave Nature of Foreign Investments in Hungary]. Külgazdaság 48(4): 48–58.

    Mészáros Á. , 'A magyarországi közvetlen külföldi működőtőke-beruházások exportenklávé jellege ' (2004 ) 48 Külgazdaság : 48 -58.

    • Search Google Scholar
  • Modigliani, Franco — Miller, Merton H. (1958): The Cost of Capital, Corporation Finance and Theory of Investment. American Economic Review 48(3): 261–297.

    Miller M. H. , 'The Cost of Capital, Corporation Finance and Theory of Investment ' (1958 ) 48 American Economic Review : 261 -297.

    • Search Google Scholar
  • Modigliani, Franco — Miller, Merton H. (1963): Corporate Income Taxes and the Cost of Capital: A Correction. American Economic Review 53(3): 433–443.

    Miller M. H. , 'Corporate Income Taxes and the Cost of Capital: A Correction ' (1963 ) 53 American Economic Review : 433 -443.

    • Search Google Scholar
  • Myers, Stewart C. (1993): Still Searching for Optimal Capital Structure. Journal of Applied Corporate Finance 6(1): 6–14.

    Myers S. C. , 'Still Searching for Optimal Capital Structure ' (1993 ) 6 Journal of Applied Corporate Finance : 6 -14.

    • Search Google Scholar
  • Myers, Stewart C. (2001): Capital Structure. The Journal of Economic Perspectives 15(2): 81–102.

    Myers S. C. , 'Capital Structure ' (2001 ) 15 The Journal of Economic Perspectives : 81 -102.

  • Myers, Stewart C. — Majluf, Nicholas S. (1984): Corporate Finance and Investment Decisions When Firms Have Information that Investors Do Not Have. Journal of Financial Economics 13(2): 187–221.

    Majluf N. S. , 'Corporate Finance and Investment Decisions When Firms Have Information that Investors Do Not Have ' (1984 ) 13 Journal of Financial Economics : 187 -221.

    • Search Google Scholar
  • Oblath, Gábor — Antal, Judit — Komáromi, András (2008): A hazai makrogazdasági statisztikák konzisztenciájáról [On the Consistency of Hungarian Macroeconomic Statistics]. Statisztikai Szemle 86(7–8): 464–665.

    Komáromi A. , 'A hazai makrogazdasági statisztikák konzisztenciájáról ' (2008 ) 86 Statisztikai Szemle : 464 -665.

    • Search Google Scholar
  • Pitti, Zoltán (2001): A külföldi tőke szerepe a hazai gazdaság új növekedési pályára állításában [The Role of Foreign Capital in the Formation of Hungary’s New Path of Growth]. Európai Tükör 4: 25–40.

    Pitti Z. , 'A külföldi tőke szerepe a hazai gazdaság új növekedési pályára állításában ' (2001 ) 4 Európai Tükör : 25 -40.

    • Search Google Scholar
  • Rajan, Raghuram G. — Zingales, Luigi (1995): What Do We Know About Capital Structure? Some Evidence from International Data. Journal of Finance 50(5): 1421–1460.

    Zingales L. , 'What Do We Know About Capital Structure? Some Evidence from International Data ' (1995 ) 50 Journal of Finance : 1421 -1460.

    • Search Google Scholar
  • Razin, Assaf (2002): FDI Contribution to Capital Flows and Investment in Capacity. NBER Working Paper No. 9204.

  • Razin, Assaf — Sadka, Efraim — Yuen, Chi-Wa (1998): A pecking order of capital inflows and international tax principles. Journal of International Economics 44(1): 45–68.

    Yuen C.-W. , 'A pecking order of capital inflows and international tax principles ' (1998 ) 44 Journal of International Economics : 45 -68.

    • Search Google Scholar
  • Razin, Assaf — Sadka, Efraim — Yuen, Chi-Wa (1999): Excessive FDI Flows Under Asymmetric Information. NBER Working Paper No. 7400.

  • Razin, Assaf — Sadka, Efraim — Yuen, Chi-Wa (2001): Why International Equity Inflows to Emerging Markets are Inefficient and Small Relative to International Debt Flows. NBER Working Paper No. 8659.

  • Reinhart, Carmen M. — Rogoff, Kenneth S. (2008): The Forgotten History of Domestic Debt. NBER Working Paper No. 13946.

  • Reinhart, Carmen M. — Rogoff, Kenneth S. — Savastano, M. A. (2003): Debt Intolerance. Brookings Papers on Economic Activity 2003(1): 1–74.

    Savastano M. A. , 'Debt Intolerance ' (2003 ) 2003 Brookings Papers on Economic Activity : 1 -74.

    • Search Google Scholar
  • Rogoff, Kenneth S. (1999): International Institutions for Reducing Global Financial Instability. NBER Working Paper No. W7265.

  • Sass, Magdolna (2003): Versenyképesség és a közvetlen külföldi működőtőke-befektetésekkel kapcsolatos gazdaságpolitikák [Competitiveness and FDI Policies]. PM Kutatási Füzetek 3.

  • Solow, Robert M. (1997): Is There a Core of Usable ... We Should All Believe In? The American Economic Review 87(2): 230–232.

    Solow R. M. , 'Is There a Core of Usable ... We Should All Believe In? ' (1997 ) 87 The American Economic Review : 230 -232.

    • Search Google Scholar
  • Szanyi, Miklós (1997): Elmélet és gyakorlat a nemzetközi működőtőke-áramlás vizsgálatában [Theory and Practice in Analyzing FDI-flows]. Közgazdasági Szemle 44: 488–508.

    Szanyi M. , 'Elmélet és gyakorlat a nemzetközi működőtőke-áramlás vizsgálatában ' (1997 ) 44 Közgazdasági Szemle : 488 -508.

    • Search Google Scholar
  • Vamvakidis, Athanasios (2007): External Debt and Economic Reform: Does a Pain Reliever Delay the Necessary Treatment? IMF Working Paper No. 07/50.

  • Verdier, Geneviève (2008): What drives long-term capital flows? A theoretical and empirical investigation. Journal of International Economics 74(1): 120–142.

    Verdier G. , 'What drives long-term capital flows? A theoretical and empirical investigation ' (2008 ) 74 Journal of International Economics : 120 -142.

    • Search Google Scholar
The author instruction is available in PDF.
Please, download the file from HERE.
 
The Open Access statement together with the description of the Copyright and License Policy are available in PDF.
Please, download the file from HERE.

Editor-in-chief: Balázs SZENT-IVÁNYI

Co-Editors:

  • Péter MARTON (Corvinus University, Budapest)
  • István KÓNYA (Corvinus University, Budapest)
  • László SAJTOS (The University of Auckland)
  • Gábor VIRÁG (University of Toronto)

Associate Editors:

  • Tamás BOKOR (Corvinus University, Budapest)
  • Sándor BOZÓKI (Corvinus University Budapest)
  • Bronwyn HOWELL (Victoria University of Wellington)
  • Hintea CALIN (Babeş-Bolyai University)
  • Christian EWERHART (University of Zürich)
  • Clemens PUPPE (Karlsruhe Institute of Technology)
  • Zsolt DARVAS (Bruegel)
  • Szabina FODOR (Corvinus University Budapest)
  • Sándor GALLAI (Corvinus University Budapest)
  • László GULÁCSI (Óbuda University)
  • Dóra GYŐRFFY (Corvinus University Budapest)
  • György HAJNAL (Corvinus University Budapest)
  • Krisztina KOLOS (Corvinus University Budapest)
  • Alexandra KÖVES (Corvinus University Budapest)
  • Lacina LUBOR (Mendel University in Brno)
  • Péter MEDVEGYEV (Corvinus University Budapest)
  • Miroslava RAJČÁNIOVÁ (Slovak University of Agriculture)
  • Ariel MITEV (Corvinus University Budapest)
  • Éva PERPÉK (Corvinus University Budapest)
  • Petrus H. POTGIETER (University of South Africa)
  • Sergei IZMALKOV (MIT Economics)
  • Anita SZŰCS (Corvinus University Budapest)
  • László TRAUTMANN (Corvinus University Budapest)
  • Trenton G. SMITH (University of Otago)
  • György WALTER (Corvinus University Budapest)
  • Zoltán CSEDŐ (Corvinus University Budapest)
  • Zoltán LŐRINCZI (Ministry of Human Capacities)

Society and Economy
Institute: Corvinus University of Budapest
Address: Fővám tér 8. H-1093 Budapest, Hungary
Phone: (36 1) 482 5406
E-mail: balazs.szentivanyi@uni-corvinus.hu

Indexing and Abstracting Services:

  • DOAJ
  • International Bibliographies IBZ and IBR
  • International Political Science Abstracts
  • JSTOR
  • SCOPUS
  • RePEc
  • Referativnyi Zhurnal

 

2020  
Scimago
H-index
11
Scimago
Journal Rank
0,157
Scimago
Quartile Score
Business and International Management Q4
Economics, Econometrics and Finance (miscellaneous) Q4
Industrial Relations Q4
Public Administration Q4
Sociology and Political Science Q3
Strategy and Management Q4
Scopus
Cite Score
103/117=0,9
Scopus
Cite Score Rank
Business and International Management 305/399 (Q4)
General Economics, Econometrics and Finance 137/243 (Q3)
Industrial Relations 40/54 (Q3)
Public Administration 116/165 (Q3)
Sociology and Political Science 665/1269 (Q3)
Strategy and Management 351/440 (Q4)
Scopus
SNIP
0,171
Scopus
Cites
157
Scopus
Documents
24
Days from submission to acceptance 148
Days from acceptance to publication 50

 

2019  
Scimago
H-index
10
Scimago
Journal Rank
0,228
Scimago
Quartile Score
Business and International Management Q3
Economics, Econometrics and Finance (miscellaneous) Q3
Industrial Relations Q3
Public Administration Q3
Sociology and Political Science Q3
Strategy and Management Q3
Scopus
Cite Score
87/110=0,8
Scopus
Cite Score Rank
Business and International Management 286/394 (Q3)
General Economics, Econometrics and Finance 125/228 (Q3)
Industrial Relations 38/58 (Q3)
Public Administration 114/157 (Q3)
Sociology and Political Science 645/1243 (Q3)
Strategy and Management 330/427 (Q4)
Scopus
SNIP
0,308
Scopus
Cites
132
Scopus
Documents
22

 

Society and Economy
Publication Model Gold Open Access
Submission Fee none
Article Processing Charge 900 EUR/article
Regional discounts on country of the funding agency World Bank Lower-middle-income economies: 50%
World Bank Low-income economies: 100%
Further Discounts Sufficient number of full waiver available. Editorial Board / Advisory Board members: 50%
Corresponding authors, affiliated to an EISZ member institution subscribing to the journal package of Akadémiai Kiadó: 100%
Subscription Information Gold Open Access
Purchase per Title  

Society and Economy
Language English
Size B5
Year of
Foundation
1972
Publication
Programme
2021 Volume 43
Volumes
per Year
1
Issues
per Year
4
Founder Budapesti Corvinus Egyetem
Founder's
Address
H-1093 Budapest, Hungary Fővám tér 8.
Publisher Akadémiai Kiadó
Publisher's
Address
H-1117 Budapest, Hungary 1516 Budapest, PO Box 245.
Responsible
Publisher
Chief Executive Officer, Akadémiai Kiadó
ISSN 1588-9726 (Print)
ISSN 1588-970X (Online)