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Foreign Investments and Economic Catching Up: The Case of Hungary

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  • András Székely-Doby

Abstract

Both economic history and theory show us that foreign capital is indispensable in the process of modernization. Countries in Central and Eastern Europe in the late 80s were facing an extremely challenging double task: they had to transform both their political and economic systems. Despite the difficulties most of them tackled all the problems with remarkable success, creating the bases of market economies and democracies simultaneously. Rapid privatization and institution building signed the way of Hungary, the first mover in the transition process, and – as a consequence – strong capital inflow (mostly FDI) occurred. The domination of MNCs has become evident by now, and outward investments began to rise, too. In this paper we analyze foreign direct investments in Hungary, the activities of multinational companies, and the characteristics of outward investments in the last two decades.

Suggested Citation

  • András Székely-Doby, 2007. "Foreign Investments and Economic Catching Up: The Case of Hungary," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 55-65.
    • Handle: RePEc:bas:econst:y:2007:i:1:p:55-65
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    References listed on IDEAS

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    1. Raymond Vernon, 1966. "International Investment and International Trade in the Product Cycle," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 80(2), pages 190-207.
    2. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    3. Chandler, Alfred D., 1990. "Scale and Scope: A Review Colloquium - Scale and Scope: The Dynamics of Industrial Capitalism. By Alfred D. ChandlerJr., with Takashi Hikino · Cambridge, Mass.: Harvard University Press, 1990. xix + ," Business History Review, Cambridge University Press, vol. 64(4), pages 690-735, January.
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    Cited by:

    1. András Székely-Doby, 2011. "The EU’s External Relations: the Case of BRIC Countries with Special Emphasis on China," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 69-79.

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    More about this item

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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