Factors and Effects of Trade Reorientation in Hungary

László Halpern ()

No 772, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: 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.

Keywords: Hungary; Panel Model; Profit; Trade Reorientation (search for similar items in EconPapers)
JEL-codes: C23 E65 F14 (search for similar items in EconPapers)
Date: 1993-03
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