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Corporate law and corporate governance. The Hungarian experience

Author

Listed:
  • Istvan Czajlik

    (National Bank of Hungary)

  • Janos Vincze

    (Budapest University of Economic Sciences and Public Administration)

Abstract

In this paper our aim was to establish legal facts for Hungary in detail, to put the country’s situation into international context, and to find new avenues for comparative research. We updated investor protection indicators already existing in the literature, while determined enforcement indicators for the first time. We hypothesize that besides indicators the dynamics of legislation must be an important topic for research. An analysis of the dynamics of legislation in Hungary indicates that two tendencies could be observed. one responding to actual challenges, leading to more reliance on the interpretation of law by judges, the second following the German-tradition resulting in more bright line rules, and more complicated legal regulation. To make the former workable political and financial independence is a necessary, though not sufficient, condition. We emphasize that though investor protection supports the supply of outside funds, there is a demand side to external finance, and more prudential regulation can lead to less demand for external finance.

Suggested Citation

  • Istvan Czajlik & Janos Vincze, 2004. "Corporate law and corporate governance. The Hungarian experience," CERS-IE WORKING PAPERS 0411, Institute of Economics, Centre for Economic and Regional Studies.
    • Handle: RePEc:has:discpr:0411
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    File URL: http://www.econ.core.hu/doc/dp/dp/mtdp0411.pdf
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    References listed on IDEAS

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    Cited by:

    1. Iván Major, 2006. "Why do (or do not) banks share customer information? A comparison of mature private credit markets and markets in transition," CERS-IE WORKING PAPERS 0603, Institute of Economics, Centre for Economic and Regional Studies, revised 24 Apr 2006.
    2. Vliegenthart, Arjan, 2007. "Regulating employee representation in postsocialist supervisory boards," SEER Journal for Labour and Social Affairs in Eastern Europe, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 10(4), pages 67-82.
    3. András Simonovits, 2006. "Social Security Reform in the US: Lessons from Hungary," CERS-IE WORKING PAPERS 0602, Institute of Economics, Centre for Economic and Regional Studies, revised 24 Apr 2006.

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