IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Ownership Structure, Business Links and Perfor-mance of Firms in a Transforming Economy The Case of Hungary

Listed author(s):
  • Janos Toth Istvan


    (Institute of Economics, Hungarian Academy of Sciences)

This study concentrates on the analysis of the characteristics of the ownership and business links existing between the enterprises; the effects of business links and financial discipline on the effectiveness and growth capability of enterprises, as well as the changes which have taken place since 1992 in the performance of Hungarian enterprises. The author regard financial discipline (the breach of payment obligations toward the partners or in the delayed payment of taxes) a very important indicator in that how safe the business links of a company can be considered. The results show that the occurrence of liquidity problems in itself has a significant effect on the breach of financial discipline. The absence of firm’s growth increases the chance for breach of financial discipline and the foreign-owned companies are better protected against the looser payment discipline of the partners. The results also confirm the better growth capability of foreign companies. If companies which are related by ownership links also establish business links, then the closer business links make better growth dynamics probable. Companies, which are each others' suppliers within a company group usually, achieve a faster growth than the rest of the companies. The analysis of tax returns shows that we are not talking simply of the temporary good influence of the transition from state-ownership to private ownership but we can emphasize a certain type of private ownership, that is, foreign ownership, which significantly improves the performance of the companies. According to the results, the contributions to the value added do not show a positive effect of privatization. The better performance of privatized (between 1993–1996) companies measured by the value added to employment in 1996 is not the result of privatization, but other technological, organizational influences or business conditions, which were in effect even before privatization.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences in its series IEHAS Discussion Papers with number 9903.

in new window

Length: 82 pages
Date of creation: 1999
Handle: RePEc:has:discpr:9903
Contact details of provider: Postal:
1112 Budapest, Budaorsi ut 45.

Phone: (+36-1) 309-2652
Fax: (36-1) 319-3136
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:has:discpr:9903. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Adrienn Foldi)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.