An Analysis of the Capital Structure of the Hungarian Corporate Sector
AbstractIt is well-known that in the 90’s enormous changes occurred in the structure of the Hungarian economy, which influenced the tradition of corporate financing. In line with political changes, foreign-owned companies appeared that adopted the financing strategies of their mother companies. In addition to the ownership structure, there were significant changes in the sectorial structure of the economy. The share of the agricultural sector has decreased; the share in employment and in GDP has shifted in favour of machinery and services (especially telecommunication and financial services). This paper examines the whole corporate branch divided into sectors, showing how company capital structure changed in Hungary between 1992 and 2003, and contains a short analysis about the period 2004-2010. One of the most important findings is that the corporate capital structure has only secondary importance; companies make primarily production, market and investment decisions, and the financing decisions are the effects of these primary decisions. This secondary manner is typical in Hungary and in the other transition economies, where the financial culture is still at a low level (although it has developed by large steps in recent years), the financial markets are underdeveloped, and companies traditionally prefer to use internal sources rather than loans with interest and principal payment obligations. This study investigates theories of capital structure against the behaviour of the Hungarian corporate sector.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Faculty of Economics, University of Miskolc in its journal Theory Methodology Practice (TMP).
Volume (Year): 7 (2011)
Issue (Month): 02 ()
Find related papers by JEL classification:
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Myers, Stewart C. & Majluf, Nicolás S., 1945-, 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Working papers 1523-84., Massachusetts Institute of Technology (MIT), Sloan School of Management.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.