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Factors and Effects of Trade Reorientation in Hungary


  • Halpern, László


The collapse of the CMEA completed the Hungarian trade reorientation during the second half of the 1980s. Panel model estimations of trade reorientation reveal that cost efficiency, export subsidy and foreign demand played important and varying roles between 1981 and 1990. During the last two years cost efficiency ceased to exert an influence on the process, and subsidies were active instead.In 1991 the recession and the increased costs of trade reorientation led to a fall in the profitability of the corporate sector and exporting firms. Exporting firms with fast-growing exports had larger profits and they managed to combine the growth of exports with the expansion of domestic sales. Foreign capital and the new corporate forms have not yet ensured better performance.

Suggested Citation

  • Halpern, László, 1993. "Factors and Effects of Trade Reorientation in Hungary," CEPR Discussion Papers 772, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:772

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    More about this item


    Hungary; Panel Model; Profit; Trade Reorientation;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade


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