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Development of the Hungarian Venture Capital and Private Equity Industry over the Past Two Decades


  • Judit Karsai

    () (Institute of Economics Research Centre for Economic and Regional Studies Hungarian Academy of Sciences)


In Hungary, the previously non-existing venture capital and private equity industry has strengthened over the past two decades, and it has become one of the leaders of the CEE region. Approximately 90% of the capital allocated to investments overall were raised from private sector investors. The volume of VC & PE fluctuated cyclically following international capital market cycles and the changes of domestic economic policy. The Hungarian market became a preferred area for foreign capital investors in the last third of the 1990s. Later on its position became even more favourable due to Hungary's accession to the EU. Between 2007 and 2008 the Hungarian market, similarly to the whole region, earned also profit from a transitory situation at the beginning of the crisis when the investment problems in Western Europe did not extend to the CEE region for some time. From 2009 on, however, the crisis in CEE also resulted in a very serious drop in investments, in spite of the significant amount of uninvested capital accumulated in recent years. In addition, the crisis affected the already weakened Hungarian economy more seriously than the other parts of the region, which was reflected by the drop in investments in 2010.

Suggested Citation

  • Judit Karsai, 2012. "Development of the Hungarian Venture Capital and Private Equity Industry over the Past Two Decades," IEHAS Discussion Papers 1201, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  • Handle: RePEc:has:discpr:1201

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    References listed on IDEAS

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    Cited by:

    1. Gillman, Max, 2012. "AS-AD in the Standard Dynamic Neoclassical Model: Business Cycles and Growth Trends," Cardiff Economics Working Papers E2012/12, Cardiff University, Cardiff Business School, Economics Section.
    2. Andras Simonovits, 2012. "Optimal Cap on Pension Contributions," IEHAS Discussion Papers 1208, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
    3. Zsolt Darvas, 2013. "Monetary transmission in three central European economies: evidence from time-varying coefficient vector autoregressions," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 40(2), pages 363-390, May.
    4. Magdolna Sass & Miklos Szanyi, 2012. "Two essays on Hungarian relocations," IEHAS Discussion Papers 1223, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
    5. Helga Habis & P. Herings, 2013. "Stochastic bankruptcy games," International Journal of Game Theory, Springer;Game Theory Society, vol. 42(4), pages 973-988, November.
    6. Andras Simonovits, 2012. "Means-tested or Flat Pension? Pension Credit," IEHAS Discussion Papers 1221, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
    7. Szabolcs Szikszai & Tamás Badics & Csilla Raffai & Zsolt Stenger & András Tóthmihály, 2013. "Studies in Financial Systems No 8 Hungary," FESSUD studies fstudy08, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.

    More about this item


    Hungary; Central and Eastern Europe; Economics in transition; Emerging markets; Venture Capital; Private Equity;

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • P34 - Economic Systems - - Socialist Institutions and Their Transitions - - - Finance

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