Andrea Éltető

Outward FDI from Hungary: the Emergence of Hungarian Multinationals

Hungary is a leading outward foreign investor among the new member states of the European Union. Our research question is what those factors are which enabled Hungarian companies to expand abroad successfully. Our methodology is based on company case studies of the leading investors and other randomly selected companies with foreign investment. Our main findings include the specific ownership advantages (OA) of privatised companies, with links to their heritage from the pre-transition period. For companies established after 1990, OA is more similar to that of “traditional multinationals.” Second, we make a link between “virtual indirect” investors and this specific OA, showing how the strong position and specific knowledge of the management are interrelated in developing and changing the OA. On the basis of our research, the policy dimension concerns, first of all, the role of increasing local competition due to increased investments by foreign multinationals. This enables a few local companies to enhance their level of competitiveness to such level where they themselves will be able to become successful foreign investors. Second, highly innovative companies in small market niches are able to internationalise successfully even in the post-transition environment. Fostering R&D is thus an important tool for trade and investment policy as well.

Russian Capital in the Visegrád Countries

This working paper analyses investment by Russian firms in the four Visegrad countries, their motivations and ownership advantages, based mostly on the eclectic paradigm. Beside statistical data, we rely on case studies to present the profile of the most important Russian investors in each host country. The Visegrad countries have attracted less Russian investment than their economic importance would warrant, due to various factors, most notably the joint effects of reticence in host countries and firm strategies that do not necessarily see the subregion as a major priority. Most of the Russian investment examined is market, and to a lesser extent, resource seeking, concentrated in the hydrocarbons, steel and nuclear energy industries, often dominated by state-owned firms. Some innovative private Russian companies, with features similar to developed-country multinationals, can also be identified with marketas well as efficiency-seeking investment. Extant investment theories with the exception of the eclectic paradigm fall short of explaining Russian investment. This paper suggests that further analysis is needed on the role of the home country in stimulating outward investment and directing it to specific locations.

Ties of Visegrád countries with East Asia – trade and investment

As a consequence of the European recession, interest of Central European firms has increased towards Asian markets. Trade and investment relations seem to have intensified between the four Visegrad countries and East Asia. This paper aims to analyse trends of foreign direct investment and the development, geographical and commodity structure of the mutual trade. Our paper also briefly outlines the economic policy of the given countries for the further development of Visegrad-Asian relations. The applied method is the statistical analysis of Eurostat and National Bank data as well as Chinese statistics. Our main findings are the following: first, trade between the Visegrad region and East Asia is largely influenced by multinational companies in global value chains; second, these networks have interlinked the two regions increasingly strongly in the past years; third, the pattern and intensity of connection to multinational networks vary among Visegrad countries. Based on these findings we propose an economic policy that – apart from the support of local small firms – considers the efficient participation in global value chains.

Export Promotion Aims and Reality: A Comparison of the Iberian, Baltic and Central European Region

Abstract As a consequence of the international crisis in 2008-2009, the role of exports in economic growth came into focus in most countries. Exports of EU Member States gained momentum from 2010 onward but with certain changes in their structure and direction. In several countries, the turn towards non-EU areas, such as China or Latin America was part of the state export strategy. On the one hand, our article describes these foreign trade strategies and their institutional framework of the Iberian, Baltic and Central European governments, detecting possible similarities. On the other hand, we analyse recent export data. This way we can get a picture on the structure and direction of exports of periphery economies and this can be compared to the aims of the given states. Our hypothesis is that there is a gap between the reality and the intentions of the governments. The size of this gap varies and is influenced by certain factors such as the different involvement of multinational companies in foreign trade or the different economic structure of these countries. In our paper we list which countries adopted a government strategy and with what aim. We provide a short literature review on state trade promotion policies and discuss these policies and their institutions in the Baltic, Visegrád and Iberian countries.