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SME Investment in Hungary: Financing Conditions, Development Needs, and Structural Misalignment

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  • Hortoványi, Lilla

Abstract

This study aims to identify the factors that explain the limited implementation of intangible and digital investments among Hungarian small and medium-sized enterprises (SMEs). The dominant explanation attributes investment restraint primarily to financing constraints; however, recent evidence suggests a more nuanced picture. Scientific and practical relevance: The paper introduces a conceptual framework – the financing alignment problem – contributing to the renewal of SME finance literature and offering direct policy implications. The analysis is based on multi-stakeholder expert discussions, qualitative interviews, and systematic review of secondary sources. The findings indicate that investment restraint is not primarily driven by a lack of access to finance, but by the limited alignment between intangible investments and the prevailing logic of financial intermediation. Stimulating SME investment requires a better fit between financing instruments and firm-level development needs.

Suggested Citation

  • Hortoványi, Lilla, 2026. "SME Investment in Hungary: Financing Conditions, Development Needs, and Structural Misalignment," Public Finance Quarterly, Corvinus University of Budapest, vol. 72(2), pages 51-66.
    • Handle: RePEc:pfq:journl:v:72:y:2026:i:2:p:51-66
    DOI: https://doi.org/10.35551/PFQ_2026_2_2
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    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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