Abstract (may include machine translation)
Like Poland as considered above, Hungary has experienced changes in every economic and financial
area since the old regime collapsed in 1989. Even though it is quite advanced relative to some other
transition economies in terms of privatisation and building market institutions, its financial architecture
is still not as developed as its counterparts in Western Europe. For example, in Hungary the ratio of
stock market capitalisation to GDP is 0.24 and the ratio of private credit by banks to GDP is 0.47
(Baum et al, 2009). Most PE investment in the country has been in the form of buyouts, as with other
transition countries such as Poland and the Czech Republic. Also, there are sectoral and geographical
concentrations and PE investments are not distributed evenly over the entire economy.
Both regulatory institutions and the industrial relations system in Hungary are considered favourable
for PE investments. There are no limitations on foreign investment and ownership, but the PE industry
argues that certain aspects of company law and the tax system could be altered to make the
environment more PE investment friendly. When it comes to industrial relations, Hungary is closer to
the liberal economies where workers are not strongly represented at the national level. Unions are
present at the shop floor and collective bargaining coverage is declining. Even though there is employee
representation at the board level, in practice most decisions are made unilaterally by managers. Both
the unions and the government have attempted to encourage the spread of collective agreements to the
sectoral level, but so far this has not been successful.
area since the old regime collapsed in 1989. Even though it is quite advanced relative to some other
transition economies in terms of privatisation and building market institutions, its financial architecture
is still not as developed as its counterparts in Western Europe. For example, in Hungary the ratio of
stock market capitalisation to GDP is 0.24 and the ratio of private credit by banks to GDP is 0.47
(Baum et al, 2009). Most PE investment in the country has been in the form of buyouts, as with other
transition countries such as Poland and the Czech Republic. Also, there are sectoral and geographical
concentrations and PE investments are not distributed evenly over the entire economy.
Both regulatory institutions and the industrial relations system in Hungary are considered favourable
for PE investments. There are no limitations on foreign investment and ownership, but the PE industry
argues that certain aspects of company law and the tax system could be altered to make the
environment more PE investment friendly. When it comes to industrial relations, Hungary is closer to
the liberal economies where workers are not strongly represented at the national level. Unions are
present at the shop floor and collective bargaining coverage is declining. Even though there is employee
representation at the board level, in practice most decisions are made unilaterally by managers. Both
the unions and the government have attempted to encourage the spread of collective agreements to the
sectoral level, but so far this has not been successful.
| Original language | English |
|---|---|
| Title of host publication | The impact of investment funds on restructuring practices and employment levels |
| Publisher | European Foundation for the Improvement of Living and Working Conditions |
| Pages | 77-83 |
| ISBN (Electronic) | 978-92-897-0874-6 |
| DOIs | |
| State | Published - 17 Jan 2011 |
Publication series
| Name | Eurofund Report |
|---|