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The Impact of EU Subsidies on the Performance of Hungarian Corporations

In: The Path of Hungary's EU Membership

Author

Listed:
  • Péter Bucsky

    (Business News Site G7.hu)

Abstract

Over the past two decades, EU funding has emerged as one of the most significant sources of support for the Hungarian economy. Since 2004, Hungarian beneficiaries have received more than €47 billion in EU Structural and Investment Funds. However, little is known about how these funds have influenced the performance of recipient companies. This chapter demonstrates that the effectiveness of these grants has been limited. Between 2008 and 2021, only three years—most recently in 2013—recorded faster revenue growth for companies receiving EU funds compared to those that did not. Moreover, the growth trajectories of beneficiary companies declined, falling behind the industry average. While EU grants appear to have increased the pre-tax profits of these companies, their profit margins have consistently remained below the national average. Overall, the data suggest that companies with below-average performance were the primary recipients of EU subsidies, which helped to boost revenues but did little to enhance efficiency and competitiveness.

Suggested Citation

  • Péter Bucsky, 2025. "The Impact of EU Subsidies on the Performance of Hungarian Corporations," Studies in Economic Transition, in: András Bíró-Nagy & Gergő Medve-Bálint (ed.), The Path of Hungary's EU Membership, chapter 0, pages 139-168, Palgrave Macmillan.
    • Handle: RePEc:pal:stuchp:978-3-031-94009-5_6
    DOI: 10.1007/978-3-031-94009-5_6
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