Browse Our Business and Economics Journals
Economics and business journals focus on publishing papers coming from the fields of applied economics, corporate finance, financial investments, markets, institutions, industrial organization, international trade, marketing and similar.
Business and Economics
This paper reports the results of an econometric examination on the links between labour productivity and output growth for 22 countries (for which long-term data are available). It turns out that, generally, labour productivity does not “cause” output. In more cases, the causation seems to be running in the opposite direction: from output to productivity. This finding, though inconsistent with the “mainstream” ideas on the sources of long-term economic growth, is reminiscent of the classical Kaldor-Verdoorn Law. The progressing slowdown in output growth on the global level, initiated around the mid-1970s (when the process of discarding the earlier economic policy paradigms set in), may have been mirrored by the progressing slowdown in productivity growth (and that despite the hardly disputable acceleration of technological progress).
The productivity slowdown in European countries is among the major stylised facts of the last two decades. Several explanations have been proposed: some focus on demand-side effects, working through Kaldor’s second law of economic growth (also known as Verdoorn’s law), others on supply-side effects determined by a misallocation of the factors of production, caused either by labour market reforms or by perverse effects of financial integration (in Europe, related to the adoption of the euro). The latter explanation is put forward by some recent studies that stress how low interest rates brought about by the monetary union may have lowered productivity by inducing capital misallocation. The aim of this paper is to investigate the robustness of the latter empirical findings and to compare them with the alternative explanation offered by the post-Keynesian growth model, which instead emphasises the relation between foreign trade and productivity, along lines that go back to Adam Smith. To do so, we use a panel of industry-level data extracted from the EU KLEMS database, comparing these alternative explanations by panel cointegration techniques. The results shed some light on the role played by the single currency in the structural divergences among euro area member countries.
This article celebrates the life and work of the Hungarian economist Nicholas Kaldor, and particularly his emphasis on industrial structure and the role of demand in determining the growth performance of nations.
From the second half of the 20th century, a set of emerging economies have undergone a remarkable developing path. During the first years of the global financial crisis of 2007–2008, Brazil, Russia, India, China, and South Africa (BRICS) were only slightly affected by its negative impacts. However, after 2013, a considerable growth slowdown period has evolved in these countries with the exception of the Indian economy. In the current study, we examine whether the growth dynamics of the BRICS economies shows significant correlation with the fluctuation of commodity prices, especially in the case of raw materials. Besides applying a cross correlation model on the quarterly commodity price indices and real GDP growth data, the research also focuses on the export structure of the selected fast-growing countries. As a closing element of our paper, a brief analysis is carried out regarding the correlations of growth patterns within the BRICS economies.
This paper deals with the effects of political decentralisation on economic growth in Spain, an issue that has generated heated debates in recent decades. Our analysis of the last three and a half decades, a period characterised by the weak narrowing of the income per capita gap within regions, does not offer conclusive results on convergence and points to the importance of alternative factors. Several proxies were used to capture the decentralisation process. We also studied some potential interactions between decentralisation and other variables. All in all, our empirical evidence shows robustly that transferring more responsibilities to subnational governments does not significantly affect growth in any sense.
The paper surveys the challenges of researching soft concepts in economics through focusing on trust. Although there is increasing evidence about its importance for macroeconomic outcomes, tensions with the homo oeconomicus model as well as the difficulties of conceptualization and measurement imply significant difficulties for research. The paper argues that comparative economics with its systemic analysis and traditional openness to interdisciplinary approaches is particularly well-suited for resolving these challenges, and it could also provide a contribution to trust research through integrating macro-, meso- and micro-level analysis.
I summarise Kaldor’s “stylised facts” approach to economics through the lens of his 1966 inaugural lecture at Cambridge, “Causes of the Slow Rate of Economic Growth of the United Kingdom”. I then defend this approach as a way of preventing economics from ossifying into pure formalism, fielding objections stemming from the Lucas critique, the advancement of econometrics, and the argument that stylised facts must depend on some prior theory. Finally, I argue that modern economics could benefit not only from his “stylised fact” approach, but also from his speculative boldness and substantive contributions to economic theory.
This paper explores the relationship between inequality and sustainability both of which are dominant considerations today. Inequality was an important preoccupation of Kaldor, although he was not concerned with sustainability, as this has only recently become an all-important issue. The paper identifies relevant criteria for determining the desirable distribution of incomes from a sustainability perspective, including considerations of justice and of instrumentality. It concludes that justice demands much greater equality of emissions (and incomes) among individuals, given that the total “safe” global emissions of carbon dioxide are limited. Instrumental considerations are not so clear-cut, as evidence suggests that sometimes greater inequality leads to reduced emissions. However, meta considerations, including motivations for pursuing economic growth and conditions likely to realise international agreements on restraining emissions, suggest that more equality within and between countries is needed to promote sustainability.
In this paper we sketch a theory about the role of supernatural beliefs in incentivizing “good” behavior among children by parents. We present a simple theory on the production and the use of certain supernatural beliefs by parents to influence their children’s behavior. A prime example of this is the idea of Santa Claus and the idea that Santa Claus rewards children according to how well they have behaved during the year. We show that under standard conditions parents face a time inconsistency problem when trying to incentivize their offspring. We claim that the production of beliefs in certain supernatural or quasi-supernatural persons who allegedly have infinite lives can help parents discipline their children. Finally, we extend this logic to a community and its ruler or rulers. We show that rulers can have incentives to influence the beliefs of their subjects. This incentive is greater whenever the ruler is a monopolist and when he or she expects to rule for a long period. Rulers with limited ability and/or superior technology for producing beliefs will also supply more supernatural stories to enforce their rule.
A basic problem with the ever-changing Hungarian retirement rules has been that they created excessive shares of gainers and of losers. Certain workers with long (and continuous) employment could retire well below the normal retirement age (NRA) with full benefit. Other workers, with fragmented and therefore short employment had to work until reaching the ever rising NRA. A peculiar consequence of these rules is the strong negative correlation between the retirement age and the length of contribution. Moving in the direction of a fair system, like the Nonfinancial Defined Contribution system, would improve sustainability and fairness.
The article introduces a research that examined the impact of family on the cooperation of individual family members in family-owned businesses by applying a theoretical framework based on family therapy, family business research and social value research. Firstly, it presents a model based on blending family therapy and social research on the individual’s value preferences with the aim of exploring the internal structure of this family effect. It also shows a possible family business consulting method in order to observe and handle the dynamics of this internal structure. Then, testing of the described model and consulting method is conducted by multiple-embedded case study research. Based on the results, refining statements are formulated regarding the applicability of family therapy in family business consulting and social value research.
This paper analyses the pricing of sovereign risk and contagion during the crises in the Central and Eastern European countries. Panel data are used to estimate the determinants of government bond spreads in three different time periods: before the crisis, during the global financial crisis, and during the European debt crisis. The econometric model includes interactions between the explanatory variables and the crisis dummies. This specification enables the coefficients to change during the crises. The empirical analysis confirms a statistically significant relationship between sovereign risk and macroeconomic fundamental variables. Additionally, the results suggest an increase in the importance of macroeconomic fundamentals during the financial crisis. The analysis also supports that sovereign credit ratings and exchange rate risk have a significant impact on government bond spreads.
Biologicals are the fastest growing segment of the global pharmaceutical market, reaching 199 billion USD sales per year with 9.8% 10-year compound annual growth rate (CAGR). Being less costly, yet equally efficacious and safe alternatives to originator reference products, biosimilars drive competition, promise budget savings and the opportunity for better patient-access. This paper examines the key factors and players of biosimilar competition in rheumatology in Hungary. Due to the scarcity of data, the total yearly expenditure on biologicals could only be estimated from different data sources. In 2015 the estimated expenditure on biologicals was around 100 billion HUF. In rheumatology indications the expenditure on biologicals was 10 (8.9-11.2) billion HUF, and the average annual net treatment cost was 1.2 (1.06-1.34) million HUF / per patient / year. The magnitude of societal benefits in terms of budget savings and health gains may result from the joint effort of policy makers, funders, physicians and patients. In rheumatology indications, biosimilar utilization could be increased by a policy supporting physician-driven interchange of the reference product to biosimilars. Also, creating a physician incentive system for broader use should be considered in order to realize the full economic advantages of biosimilars and contribute to sustainable healthcare financing in Hungary.
This paper examines the impact of EU enlargement and the global economic crisis on the relative development of the EU countries. This effect is assessed by applying multivariate analysis to the whole set of 28 European countries at three representative points in time. The cluster analysis for the years 2002, 2007, and 2012 grouped the countries according to the range of economic development indicators showing within-EU cohesion before the EU enlargement, after the enlargement wave, and after the crisis. The findings show that a decrease in the development differences after the enlargement was replaced with an increase in these differences after the crisis, thus contributing to the existing debate about the success of cohesion and future of European integration. These results are somewhat worrying for the new member states of the EU as well as for EU membership candidates and their prospective development within the integration.
The 2008 crisis highlighted how fragile the labour markets of the European Union’s member states were, while it also directed attention to the eventual further deepening of integration as a potential solution. Nevertheless, employment and labour market policy competences are still on the national level with relatively low EU intervention. In a recent study, we explored the role of the EU in facilitating potential policy solutions with regards to labour market resilience until 2030. The study focused on labour market experts’ opinion, coming from different European countries; and took form of an online Policy Delphi Survey combined with backcasting to predict the importance and feasibility of policies concerning future challenges. The most important policies considered to be best suited to deal with the main challenges of the labour market in the EU until 2030 are education, investment in human and social capital and improvement of social policies and protection, including migration policy. The research revealed a systematic gap between the importance and feasibility of relevant solutions.
This paper provides an empirical analysis of the relationship between the labour income share and financialisation, as well as other related variables in Portugal from 1978 to 2012. We estimate an equation for the labour share that includes standard variables (technological progress, globalisation, education and business cycle) and variables to capture the effect of financialisation. We formulate the hypothesis that the financialisation process may lead to a rise in the inequality of functional income distribution through three channels: the change in the sectoral composition of the economy (due to both the increase in the weight of financial activity and the decrease in government activity), the diffusion of shareholder value governance practices and the weakening of trade unions. Our results show that the financialisation process has an indirect long-term effect on the labour share through its impact on government activity and trade union density. The paper also finds evidence supporting the traditional explanations for functional income distribution, namely globalisation, education and business cycle.
The opinions of people are expected to forecast their actions, and even major economic institutions rely on this correlation. This research paper examines a case when the opinion of people about their financial situation contradicts their financial-related actions. In 2012 in Hungary the general opinion of people about their financial situation was showing the lowest confidence in the world, with a significant declining trend, reaching an extremely low level. Although the general expectation would be that this pessimism triggers a set-back in consumer spending, figures show that Hungarians were on the other end of the scale regarding their expenditures and were greatly increasing their spending. This raises the question: why do people say they are in such a tough financial situation yet instead of saving they increase their spending? This paper presents a cross-country analysis that reviews the severity of this discrepancy, as well as proves the validity of the question by excluding several alternative explanations, followed by a recommendation and hypotheses for a detailed research to explain the phenomenon.
Palestinian refugees have a special status under international law. Their de facto statelessness provides for the discretion of hosting nations in treating them. A significant number of displaced Palestinians and their descendants have arrived in Lebanon, which treats them as “campers” and “temporary guests”, thereby depriving them of the rights to education, to work, to buy properties; overall, to legally exist. The situation of Palestinian refugees has been subject of cultural and legal research extensively. We have attempted to add new results to the existing literature and findings: the cultural-economic aspects of the existence of semi-legal Palestinians through a time-dimension. Our paper summarizes the findings of a three-tier field-study. We started with the first wave of interviews and surveys in late 2014, then completed the second round in late 2015, and finally, finalized our research in March 2016, with several rounds of interviews. Though we also visited settlements and camps outside the capital, the overwhelming majority of our work concentrated on Beirut and the Palestinian camps therein. We observed both cultural similarities and differences between the migrants and the host population. The added value of the research is that it highlights the amplitude and pervasiveness of these impressions.
The aim of the study is to prove that agents organised by market forces tend to create and even more so deepen economic disparities over time. Empirical studies do not reliably describe the trend and causes of interpersonal global inequality in recent decades. Hence, the attention is turned to general economic theory with inspiration from Schumpeterian and neoclassical theories. The results indicate that pure market economy logic will tend to lead to multi-level divergence.
For the last few decades, considerable attention has been paid to the methodology of mainstream economics. It is not mere chance that economics is surrounded by methodological debates. If its relevance is at stake, this can be either refuted or proven most efficiently at a methodological level. Arguments for and against mainstream economics underline the methodological homogeneity of mainstream economics, while serious, though almost neglected, arguments can be found for a view according to which the long history of mainstream economics can be described as a sequence of methodological breaks. I argue, firstly, for a sharp demarcation by new classical macroeconomics from the Friedmanian instrumentalism and, secondly, for the realism of new classicals. I strive to identify the epistemological principles underlying Lucas’ models and to highlight the signs of that demarcation as well. I concentrate on the techniques by which new classicals could set their models into an indirect relationship with reality. It is also highlighted that the common terminology, according to which the assumptions of abstract economic models are uniformly regarded as “unrealistic”, actually refers to two different techniques. From these approaches, there is only one which can be justifiably labelled as realist.
Mass migration was, is, and will always be an important topic of discussion regardless of whether it is economically, socially, or politically motivated. This is certainly a matter of great concern for Romania, currently Europe’s largest sender of migrants to Western Europe. Considering that the educational system should be of the uttermost priority, we addressed the issue of emigration propensity among Romanian teachers making use of data from our own nationwide survey. Bivariate logistic models were employed to identify the main factors behind the emigration decisions of pre-university teachers. Aiming to enrich the narrow economic perspective, we adopted a novelty approach by focusing on an overlooked determinant in emigration research studies, namely ethnicity in relation to nationality. Among Romania’s minorities, Hungarians are the most important ethnic group, accounting for 6.1% of the population, hence we explored their migration behaviour compared to Romanian ethnics. The results from the logistic regression models indicate significant differences regarding the factors that trigger the intention to initiate the emigration process for our subjects, based on their ethnicity. We found that teachers of Hungarian ethnicity display 50.6% less propensity to emigrate compared to the ones of Romanian ethnicity and we were able to shape distinct emigration profiles for the two groups.
Our paper seeks answers to the following questions: What are the determinants of permanent emigration from Poland and how do they vary for specific economic age groups (pre-working, working, and post-working age)? Do the causes of permanent emigration differ over space in these categories, and if so, how? We applied GIS and ESDA instruments, including geographically weighted regression, which allowed us to identify the variability of regression coefficients in the geographical space. Our research indicated socio-economic factors (among others: poviats budget income, feminisation rate, unemployment rate), which, with varying force and in varying directions, affected the studied variable in specific parts of the country. The analyses were performed on the basis of statistical data on the numbers of de-registrations for residence abroad in Poland’s NUTS-4 in three economic age groups (pre-working, working, and post-working age) for the time span from 2005 to 2013.
More and more research is dedicated to address the phenomenon of online word-of-mouth (WOM). Concerning electronic WOM, three major underlying motives can be differentiated: opinion seeking, opinion giving and opinion passing (Flynn et al. 1996; Sun et al. 2006). The main aim of the research is to analyse the relationship between these three dimensions and the level of customer satisfaction. The research is based on a representative sample of 1000 respondents living in Hungary. According to the hypothesized Structural Equation Model (SEM), we can conclude that online opinion seeking behaviour has a significant positive impact on levels of customer satisfaction, as well as on opinion giving and opinion passing. This implies that opinion leaders not just share, but also collect enormous amounts of information about products and services and raise their expectations according to feedback. By doing so, their prior expectations are in relation to the true customer value of online stores and products. This means that customer satisfaction — measured using the disconfirmation paradigm — will reach a higher level, so it is advisory for online retailers to encourage customers to give feedback, write reviews, because it will affect the customer satisfaction level in a positive manner.
Exports play a significant role in the economic catching-up transition in Central and Eastern Europe (CEE). The East Asian market has emerged for CEE’s exports not only because of its dynamic economy, but also because of the European debt crisis, the political tension between Ukraine and Russia, and the recent threat of terrorism. This study utilises panel ARDL models to estimate the long-run and short-run relationships between export instability and commodity concentration and geographic concentration. The datasets cover the 2004–2014 period for the trade of all the CEE countries with 10 East Asian marketplaces. The results of the causal relationships show significance in the long-run, but not in the short-run. This study suggests that the CEE export policy toward East Asia is likely to consider the impact of trade concentrations on export instability.
The paper presents an analysis of the shift in the ownership policy of the Polish government in office since 2015 towards a more active role of the state and a more reluctant attitude towards privatisation. This shift reflects a general change in the paradigm of the role of the state towards the concept of the state as a strong market player, which includes the strengthening of its ownership functions. Among others, it has led to stalling the privatisation process and concentrating only on its fiscal goals. Possible factors causing this statist shift are divided into two dichotomic groups: the government’s good faith vs. the impact of rent-seeking interest groups and endogenous vs. exogenous factors. Our main conclusion is that despite similarities with the trends observed in some other countries, endogenous factors such as increasing capture of the state by rent-seeking groups, and not the exogenous ones, including the global financial crisis, contributed most to the growing statist trends in the Polish state’s ownership policy.
The end of the Communist regime brought about great changes in the economies of Central and Eastern Europe; the restructuring of foreign trade was one of the biggest challenges for these countries. After the transition period, Hungary became a very open country, with its trade to GDP ratio around 1.5, while trading with more than 190 countries. The aim of this paper is to analyse the determinants of exports between 1993–2014, with an emphasis on the impact of factor endowments. According to our results, economic size, common border, and free trade agreements had a statistically significant positive effect on exports, while the coefficient of distance had the expected negative sign. We measured factor endowments with several approaches and our results show that exports change in line with the Linder hypothesis, i.e. Hungary tends to trade more with countries having similar factor endowments, and thus its trade is based on differentiated products.
The recent electoral success of far-right and far-left parties is often considered to be a side-effect of the economic crisis. This article aims to determine the degree to which the downturn in economic performance helped to increase the vote share of these parties. The research includes a set of 23 EU member states from the period 1995 to 2012, and finds that poor economic performance significantly determined the vote share of the far-left. Among the indicators influencing the far-left electorate were mainly changes in the GDP and unemployment rate. The research does not find any correlation between the far-rights vote share and the development of macroeconomic indicators.
The paper discusses the frameworks and development of the introduction of the Euro in Central Europe, with a focus on pre-entry countries (Czechia, Hungary, Poland, Romania and Croatia). The main elements of monetary integration maturity are the state of real-integration (possibilities of large saving in transaction costs), meeting the criteria of functioning market economy and the single market; macro-economic stability and meeting the Maastricht criteria; and shortcomings of absorption (integration) capacities of the EU. Controversial questions are also discussed, such as requirements concerning inflation, the budget deficit or exchange rate stability. The paper argues that the countries under scrutiny show diverging courses of action and policies, public support is also unclear, and the interests of TNCs and political elites contradict each other. Cultural, legal, security or emotional factors will pay a key role in eventual adoption, and prospects also depend on the solution of the current debt and migration crises.
The main objective of our research is to examine the effects of financial distress on ownership structure and to elaborate on the factors that influence change of ownership in companies that have adopted a reorganisation plan in the Republic of Serbia. Of the 63 sample companies reorganised in bankruptcy proceedings between 2009 and 2015, the ownership structure remained unchanged in 49 companies, while in 35, the existing owners or their family members remained in charge of key management positions. Using binary logistic regression, we observed that two factors influenced the change in ownership structure: the length of time it takes to resolve the insolvency process and whether the owners were involved in the running of the distressed company before it filed for bankruptcy. The obtained results indicate that corporate governance mechanisms in distressed Serbian companies are not efficient.
This study focuses on the theory of planned behaviour in order to understand and to predict the entrepreneurial behaviour of Romanian early-stage entrepreneurs and intrapreneurs, identifying the main differences among them. We first present the individual level analysis of these new venture creators using the Global Entrepreneurship Monitor (GEM) Adult Population Survey database of Romania from 2011 to 2014, followed by the estimation of logistic regressions in order to test the applicability of the theory of planned behaviour in predicting entrepreneurial behaviour. We aim to contribute to the understanding of differences in start-up activities by broadening the concept of start-up to include intrapreneurship as well. The findings of this study provide partial support of the theory of planned behaviour.
It is suggested that international trade has a positive effect on the growth rate of economies. Although a vast literature has illustrated that open or more liberalised economies grow faster, the specific factors that promote this process have only recently begun to be investigated. We belive that there is a non-linear relationship between trade and growth, with the impact depending on a number of macroeconomic factors, i.e. the magnitude and even the direction of the effect of trade on economic performance might depend on other macroeconomic variables. Within this framework, our study aims to investigate the possible non-linearity in the trade-growth relationship, with a special focus on the financial deepening level for the selected Central and Eastern European (CEE) countries. Unlike the existing empirical literature on trade-growth nexus for the CEE economies, we utilise threshold regression techniques, where we allow the size and direction of the impact of trade on growth to differ between regimes, conditioning on the financial deepening level of these countries. Regarding credit growth and investment/credit ratio as thresholds, the countries in the upper regime benefit significantly more from trade.
The goal of the paper is to analyze the demographic discrepancies in the relationship between customers’ perceptions of corporate social responsibility (CSR) and their loyalty towards mobile telecommunication companies, within the particular socio-cultural and economic context of one of the largest national markets of Central and Eastern Europe. For this purpose, a survey was conducted among a sample of 1,464 mobile telecommunication customers from the urban areas of Romania. The findings emphasize several significant dissimilarities between gender, age, education and residence type based consumer categories in what concerns the impact of various CSR dimensions, as perceived by customers, on corporate brand loyalty. The results have practical implications for enhancing corporate brand loyalty in the regional mobile telecommunication market by outlining those CSR policies which should have priority in implementation and, especially, communication.
The paper studies the relationship between key factors influencing senior entrepreneurship and the level of inclusiveness of seniors in entrepreneurial activity in Europe. The objective is to cluster countries with similar patterns in senior entrepreneurial inclusivity and to identify the factors leading to inclusive entrepreneurship of seniors and their social cohesion. The focus is on European countries which participated in Global Entrepreneurship Monitor (GEM) between 2001 and 2012, using GEM data as the main source for the analyses. Initially, the authors identify the key factors influencing entrepreneurial activity of seniors within Europe based upon data contained within the literature review. At the same time, utilizing the senior entrepreneurship inclusivity index, the authors measure the level of inclusiveness in each European country. Using the results of these analyses the authors subsequently implement a cluster analysis method to create clusters among European countries based upon the similarities in the relationship between the levels of senior entrepreneurship and entrepreneurial activity of the general population. This helps them identify countries with above average levels of senior entrepreneurship inclusivity. The results allow the authors to assess key similarities in clustered economies in terms of entrepreneurial culture and policies which have a major influence on senior entrepreneurship.
We investigate the most recent experiment of the state-led development approach in Brazil, and reveal some of its merits and shortcomings in the light of the current difficulties of the country. Using institutional and political economy approach we argue that under the Lula administration (2003–2010) a special economic policy mix has emerged, which although maintained some continuity with both the old Brazilian developmental state and the neoliberal reform period, can be regarded as a new model of developmental state (DS) in Brazil. The way how Brazil has achieved pro-poor and inclusive growth since the Millennium offers useful lessons for other emerging and developing countries. At the same time, economic and social processes of the last 4-5 years have highlighted the fragility of the new Brazilian developmental state model and finally led to its dismantling (while even raising questions whether it can be regarded as a DS at all).
The paper deals with seminal changes in the socio-economic life of the Roma community in the village of Cserdi in Hungary, brought about by a host of strategic programs of a dynamic Roma Mayor. It suggests several measures to develop a viable development model by consolidating his programs with a few modifications to suit the Roma, who constitute the majority population in the village, as well as their counterparts living elsewhere in Hungary and Central and Eastern Europe. It also illustrates how such a model has proven to be a successful strategy in developing and empowering marginalized groups in India, while arguing its efficacy for the Roma situation in Hungary.
In the aftermath of the 2008 financial crisis, the recovery in economic activity has been weak and much of the academic and policy discussions seek to explain this sluggish growth. This literature review presents how the secular stagnation hypothesis re-emerged in 2013 and evolved over time. It identifies its key tenets, its most contentious points and its most important critiques. Secular stagnation has different interpretations, which complicates the debate, and the objective of this paper is to clarify the demarcation lines between various theories and to show how some of them amalgamated over time. The secular stagnation hypothesis links weak growth to a decline in natural interest rates. Most observers agree that natural interest rates have indeed declined over the past decade and may be in negative territory. However, there are diverging views about the factors which led to negative interest rates and how lasting their impact is likely to be. The secular stagnation hypothesis points to various fundamental factors and suggests a long-term effect, while the global savings glut and debt super-cycle concepts assume only a temporary impact and anticipate that global economic growth and real interest rates will eventually rebound.
Recently, there has been a growing interest in the solvency of financial intermediaries. Bank and insurer insolvency cases generated numerous adverse economic effects and also promoted academic efforts to design solvency-related taxation methods. The focus of this paper is on corporate taxation and its empirical relation to solvency in the Hungarian financial intermediation sector. Based on the previous literature, a complex empirical model of the interactions between capital formation, asset growth and solvency risk is presented, and panel data results are compared for banks and insurance companies. A comparison with international empirical results is also possible, although it may only be of limited relevance due to some differences in solvency measurement. The paper also aims to highlight the potential differences between banking and insurance. As far as solvency effects are concerned, the empirical results do not reveal significant differences in these two sectors; however, other results point to the heterogeneity of the Hungarian financial intermediation sector.
Entrepreneurship is widely accepted to be the engine of development. In the era of massive changes in the employment patterns and the emergence of self-employment, it is increasingly important to guide graduates towards self-employment. At the same time, the low intensity rates of youth in active citizenship behaviour require some intervention from higher education institutions. They are ideal settings for training and career guidance, especially if the curriculum contains elements of entrepreneurial orientation. The present article inquires into the motivation of graduates to choose the entrepreneurial path, with special emphasis on two variables, active citizenship and the concept of calling, which is novel in the career development literature.
Erwin Schrödinger’s Cat model is a thought experiment from quantum mechanics to visualise “neither dead, nor alive” types of transitional situations. This essay draws certain parallels between this Cat and the Brexit process. A process that has been initiated but, in a strictly legal sense, not yet unleashed. It might be officially launched one day by the UK government, but without any certainty as to whether it would be completed at all. There seems to be no trade policy model, which would be optimal for both sides: keeping the UK within the Single European market for goods and capital, while introducing constraints on the free flow of labour is not a real option. A possible strategy for both parties may be procrastination: declaring that Brexit is underway, but maintaining the pre-2016 conditions of economic co-operation and integration, prolonging the current Cat-like situation.
This paper reviews the deeper societal and economic reasons behind the British choice of leaving the European Union. We address the detailed results of the referendum and the long-standing sceptical British attitude towards European integration; next, we analyse the net budgetary contribution that changed enormously after the Eastern Enlargement. It is argued that the rise in the immigrantnative ratio had a significant impact on employee’s pay level in certain areas, therefore pro-Brexit campaigners highlighted migration as one of the major problems arising from EU membership. Increasing income and wealth inequalities and a growing anti-elite sentiment in British society, coupled with the negative image of Brussels bureaucrats and a British approach to the rule of law that is fundamentally different from the continental one, also contributed to the final result of the referendum. Our analysis ends with a glimpse into the close future, emphasising that the future of British-EU relations depends wholly on the pragmatism and wisdom of the negotiating parties.
Globalisation and the loosening of credit conditions have led to an increase in income and wealth inequalities in the developed economies. The 2008–2009 crisis has forced a deleveraging process, leading to a prolonged recovery due to further demand cuts. The protracted economic problems and the inadequate management of economic policy in the EU increased social discontent that may have eventually contributed to Brexit. The short- and long-run impacts of the decision are difficult to judge, given that the details of the exit process cannot yet be known. Currently, there is a consensus among analysts that the negative economic effects could be greater in the UK in the short term. However, in the longer term, the UK may benefit from a potentially more flexible economic policy framework, while socio-political and economic risks are imposed on the European economy by the secondary effects due to its structural problems and the uncertain future of its institutional system.
As a small open economy, Hungary highly depends on the economic performance of its foreign trade partners. We have found that the economic impact of Brexit on Hungary remains moderate. Among the direct channels, the foreign trade channel may be the dominant. Meanwhile, the reduction of EU funds and remittances will affect the Hungarian growth only modestly. Hungary’s vulnerability has improved substantially since the 2008–2009 crisis. Accordingly, potential secondround effects of Brexit may remain subdued and be mitigated through substantial room for manoeuvre for economic policies.
It is argued that European integration has not fulfilled its chief economic promises. Output growth has been increasingly weak and unstable. Productivity growth has been following a decreasing trend. Income inequalities, both within and between the EU member states, have been rising. This sorry state of affairs is likely to continue — and likely to precipitate further exits, or eventually, the dissolution of the Union. However, this outcome is not unavoidable. A better integration in the EU is possible, at least in theory. Also, the negative consequences implicit in the existence of the common currency could be neutralised. However, the basic paradigms of the economic policies to be followed in the EU would have to be radically changed. First, the unconditional fiscal consolidation provisions still in force would have to be repelled. Second, “beggar-thy-neighbour” (or mercantilist) wage policies would have to be “outlawed”.
The aim of this paper is to investigate the influence of fiscal rules on the budgetary outcomes in 27 European Union countries. In particular, the paper focuses on assessing whether the impact of fiscal rules is statistically significant and numerically meaningful. In order to assess the influence, we use a dynamic panel data model. In our baseline model, we introduce the fiscal rule index as an explanatory variable. Our estimation rests on the fiscal reaction function. The analysis shows that the fiscal rule index positively affects the cyclically-adjusted primary balance and the cyclicallyadjusted balance.
This essay is an attempt to put two major events in a broader perspective. Comparing the two dominant discourses, we attempt to address the meaning and thus the strategic options of European integration at a time of crisis. A political economy approach is adopted to explain the different dynamics of the two cases and to specify conditions for a more efficient integration in the years to come. Some proposals for policy reform conclude.
