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The Competitiveness of Hungarian Industry

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  • Hare, Paul G
  • Hughes, Gordon
  • Michael, Thomas
  • Revesz, Tamas

Abstract

Using an RAS update to 1990 of an 86-sector input-output table for Hungary in 1986, and corresponding data on world-to-domestic price ratios for 1990, this paper calculates domestic resource costs (DRCs) for Hungarian industries. The disaggregated results are compared with corresponding estimates for a more aggregated model using a 21-sector input-output table. The paper discusses limitations of the data, but we find that the main calculations are quite robust, since very similar rankings of sectors are obtained under a variety of conditions. Hungary's trade relationships and constraints on trade make it uncertain whether particular sectors, like agriculture, should be treated as tradable or non-traded. We therefore obtain results for both possibilities. Finally, the paper analyses the likely impact of the recently concluded Association Agreement between Hungary and the EC on Hungary's competitiveness, finding that some sectors will be strengthened, e.g. forestry, agriculture and food processing; and others will face more difficult conditions, e.g. extraction. Other sectors are not greatly affected, so consumer goods, much of chemicals, and metallurgy remain uncompetitive.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 736.

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Date of creation: Oct 1992
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Handle: RePEc:cpr:ceprdp:736

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Related research

Keywords: Domestic Resource Cost; European Commission; Hungary; Industrial Competitiveness;

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Cited by:
  1. Goodhue, Rachael E. & Rausser, Gordon C. & Simon, Leo K., 1996. "Privatization, market liberalization and learning in transition economies," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt6vw536q0, Department of Agricultural & Resource Economics, UC Berkeley.
  2. Marc Duponcel, 1998. "Restructuring of food industries in the five Central and Eastern European front-runners towards EU membership (CEEC-5). A comparative review," CERT Discussion Papers 9806, Centre for Economic Reform and Transformation, Heriot Watt University.

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