Business Confidence in the Sustainable Manufacturing Sector in the Context of Production, Production Prices, and Interest Rates

Alžbeta Suhányiová (), Ladislav Suhányi and Michaela Kočišová
Additional contact information
Alžbeta Suhányiová: Department of Business Management and Environmental Engineering, Faculty of Mechanical Engineering, Technical University of Kosice, Letná 9, 042 00 Kosice, Slovakia
Ladislav Suhányi: Department of Marketing and Management, Tomori Pál College, Művelődés str. 21-27, 1223 Budapest, Hungary
Michaela Kočišová: Department of Business Management and Environmental Engineering, Faculty of Mechanical Engineering, Technical University of Kosice, Letná 9, 042 00 Kosice, Slovakia

Sustainability, 2023, vol. 16, issue 1, 1-20

Abstract: Business confidence can be a very important predictor of future development and sustainability in a selected industry. It is one of the economic sentiment indicators belonging to the most important indicators of the health of the economy. This paper examines the relationships between the Business Confidence Indicator (BCI) of the manufacturing sector and the production, production prices, and interest rates of two neighbouring countries, the Slovak Republic and Hungary. These relationships are examined within the manufacturing sector because it has long been the driving force of sustainable economic development and has significant spill-over effects on the other sectors of the economy. A cluster analysis is performed with the aim of positioning the selected countries into clusters within the OECD countries in relation to the examined variables. Multiple regression models were used to verify the mentioned relationships between variables, separately for each of the two analysed countries. The coefficients of determination are not too high (Slovakia 0.5 and Hungary 0.38), but in the case of sentiment, they reach higher values than in comparable research. Data from the freely available OECD database was used. It can be concluded that the results show positive relationships between the BCI and the production and long-term interest rates, and negative relationships between the BCI and the Producer Prices Index (PPI) and short-term interest rates. The relationship with the short-term interest rates cannot be confirmed in the case of Hungary. Other differences are also shown in that a higher PPI can negatively affect the BCI more intensively in Hungary (regression coefficient 0.18), and that in the case of the Slovak Republic, it appears that the level of influence of the long-term interest rates on the BCI is higher than that in Hungary (the difference between the regression coefficients is 0.27). Practical implications are stated for relevant institutions in the country in three areas: (1) in support of increasing production; (2) in the regulation and subsidization of input production costs; (3) in the stabilization of the lending behaviour of financial institutions.

Keywords: sustainability of business confidence; manufacturing sector; sustainable economic development; production; production prices; interest rates (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/16/1/173/pdf (application/pdf)
https://www.mdpi.com/2071-1050/16/1/173/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:16:y:2023:i:1:p:173-:d:1306342

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().