The hungarian SME sector development in comparative perspective [antikvár]

Preface Following the turbulent period of political changes, grand designs of economic transformation - liberalisation, privatisation, stabilisation - an unprecedently swift trade re-orientation from the Soviet Union towards the West (first of all, western Europe) as well as the concomitant tremendous decline of production and incomes, the Hungárián economy, üke the economies of the other central European countries, has become stabilized. The downward trend has come to an end. In 1997 and 1998, Hungary's GDP growth at a rate between 4-5 per cent became considerable in international comparison. However, dynamic growth has reflected an unbalanced situation. While growth has been significant, or even enormous in somé fields, certain sectors and certain types of activities have remained essentially stagnant. Exports have exploded, especially in the fields which are dominated by multinational companies. As a result of large-scale, mostly green-field investments of those companies exports in somé branches of machinery are increasing at unbelievable rates. Many parts of western Hungary are really booming. At the same time, domestic demand has gathered strength at a much slower pace. Activities which have little to do with the international markets and multinational companies have stagnated or shown little progress. Many manufacturing branches and other industries as well as somé regions (mostly, but not exclusively in the eastern part of the country) have been hardly hit. Small and médium sized firms selling goods and services to domestic partners have typically belonged to the more slowly growing segments of the economy. Although Hungary's reliance on foreign direct investment and the related dynamism of trade is somewhat more pronounced than in somé other comparable economies, duality of the economy and of the economic development is not uncommon among the emerging markets, nor among the former socialist countries. This is a most important factor behind the nowadays wide-range research concerning both the role and manyfold problems of the multinational companies and the small and medium-sized firms in those economies. In the recent years, the KOPINT-DATORG Foundation has extensively been involved in research on the activities of small and médium sized enterprises. This volume presents the results of the most recent work done in this field focusing on tax behaviour and financial discipline of Hungárián SME, on the assessment of the impact of hidden economy on employment. Efforts were made to place results of empirical analysis in an international comparison. Joint financial support of the CIPE/USAID and KOPINT-DATORG Foundation made it possible to complete the research and publish the book. Budapest, October 25, 1998. András Köves