1 / 34

Corporate responses to the economic crisis: The Hungarian case

Corporate responses to the economic crisis: The Hungarian case. Ágnes Czibik (GVI) – Ágnes Makó (GVI) – István János Tóth (MTA KTI). HCCI Institute f or Economic and Enterprise Research. 30th CIRET Conference – Economic Tendency Surveys and the Services Sector

gianna
Download Presentation

Corporate responses to the economic crisis: The Hungarian case

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Corporate responses to the economic crisis:The Hungarian case Ágnes Czibik (GVI) – Ágnes Makó (GVI) – István János Tóth (MTA KTI) HCCI Institute for Economic and Enterprise Research 30th CIRET Conference – Economic Tendency Surveys and the Services Sector New York City, Westin New York at Times Square 14 October 2010 http://www.gvi.hu/

  2. Topics Motivation of the research Hungary in a nutshell - main problems of the economy Business situation and adaptation - results of three ad-hoc surveys Conclusions Topics Hungary in a nutshell  Business situation and adaptation: survey results Conclusions 2014.06.10. 6:23 http://www.gvi.hu/ 2

  3. Motivation A special crisis beyond the business cycle: structural changes – what happens to companies? Ad-hoc survey on business climate and on the reactions of firms – do they react as usual or is it special? Loan market crisis – examining companies with loan Topics Hungary in a nutshell  Business situation and adaptation: survey results Conclusions

  4. Hungary Topics  Hungary in a nutshell  Business situation and adaptation: survey results Conclusions • Central-Eastern Europe • Area: 93 030 km2 • Population: 10 001 000 (July 2010)

  5. Main problems of the Hungarian economy 2014.06.10. 6:23 http://www.gvi.hu/ 5

  6. Crisis before the crisis Topics  Hungary in a nutshell  Business situation and adaptation: survey results Conclusions • " Crisis before the crisis ":long period of recession2006.Q3 -2007.Q4 • Governmental measures • EU-markets • Beginning of the recovery - world crisis: 2008.Q2 – dramatic deterioration

  7. Lost position Topics  Hungary in a nutshell  Business situation and adaptation: survey results Conclusions • Falling behind the Central European region • Per capita GDP: 63% of theEU-27 (2009)

  8. Lost position Topics  Hungary in a nutshell  Business situation and adaptation: survey results Conclusions • Falling behind the Central European region • Per capita GDP: 63% of theEU-27 (2009) • Slovakia: overtook in 2006

  9. Lost position Topics  Hungary in a nutshell  Business situation and adaptation: survey results Conclusions • Falling behind the Central European region • Per capita GDP: 63% of theEU-27 (2009) • Slovakia: overtook in 2006 • Poland: catching up

  10. Lost position Topics  Hungary in a nutshell  Business situation and adaptation: survey results Conclusions • Falling behind the Central European region • Per capita GDP: 63% of theEU-27 (2009) • Slovakia: overtook in 2006 • Poland: catching up • Czech Republic: keeping good position

  11. Extremely high deficit Topics  Hungary in a nutshell  Business situation and adaptation: survey results Conclusions • One of the countries with the highest deficit in the EU • Governmental measures in 2006 • Decrease of government deficit

  12. Topics  Hungary in a nutshell  Business situation and adaptation: survey results Conclusions Lowemployment • One of the countries with the lowest employment rate in the EU • Reasons: transformation shock, tax burden, black work • Crisis – between 2008.Q4and 2010.Q1: the number of employed decreased by 200 000 2014.06.10. 6:23 2014.06.10. 6:23 http://www.gvi.hu/ 12 12

  13. A "province" of Germany? Topics  Hungary in a nutshell  Business situation and adaptation: survey results Conclusions • 2009: • Small open economy: export/GDP=64% • 2008: • 24% of FDI from Germany • 2009: • 25,6% of export • 24,8% of import

  14. Business situation and adaptation - results of three ad-hoc surveys Topics  Hungary in a nutshell  Business situation and adaptation: survey resultsConclusions 2014.06.10. 6:23 http://www.gvi.hu/ 14

  15. Survey parameters Period: March and June 2009, March 2010 Survey method: CATI Sample: Hungarian enterprises, quota sampling by bank loans Sectors: manufacturing, construction, trade and other services Case numbers: 314 companies in March, 302 companies in June, 300 companies in March 2010. Panel database: N=184 Test of homogeneity: identical sample distribution by company size and sectors The research was supported by the National Office for Research and Technology, Jedlik Ányos Programme. (Project number: NKFP_07_A2-TEXTREND, Contract number: OM-00002/2008) Topics  Hungary in a nutshell  Business situation and adaptation: survey resultsConclusions http://www.gvi.hu/ 15

  16. Special Crisis Climate Index CCI = (a1 + a2 + a3 + a4 + a5) / 5 Topics  Hungary in a nutshell  Business situation and adaptation: survey resultsConclusions http://www.gvi.hu/ 16

  17. Topics  Hungary in a nutshell  Business situation and adaptation: survey resultsConclusions Results http://www.gvi.hu/

  18. Topics  Hungary in a nutshell  Business situation and adaptation: survey resultsConclusions Companies with credit: barely different CCI • Companies with credit were in worse situation only in March 2009 • The difference disappeared

  19. Exporting firms: steep falling - faster recovery Topics  Hungary in a nutshell  Business situation and adaptation: survey resultsConclusions • Crisis: driven by narrowing of export markets • Exporting firms’ CCI were positive in March 2010 2014.06.10. 6:23 http://www.gvi.hu/ 19

  20. Topics  Hungary in a nutshell  Business situation and adaptation: survey resultsConclusions Clustering method • Does the developed/less developed dichotomy appear in the data? • Two clusters for „developed” and „less developed” companies • Clustering by export, foreign ownership, net sales revenue, number of employees

  21. CCI by two different type of firms Topics  Hungary in a nutshell  Business situation and adaptation: survey resultsConclusions • Developed firms were in better situation in all three surveys • Absence of Dec 2008 survey 2014.06.10. 6:23 http://www.gvi.hu/ 21

  22. Topics  Hungary in a nutshell  Business situation and adaptation: survey resultsConclusions Regional impacts of the crisis • Crisis reached first the developed regions (West and Central Hungary) • Index of registered unemployment rose first here Sept 2008 Dec 2008 March 2009 June 2009 March 2010

  23. Topics  Hungary in a nutshell  Business situation and adaptation: survey resultsConclusions Corporateresponses 2014.06.10. 6:23 http://www.gvi.hu/ 23

  24. Topics  Hungary in a nutshell  Business situation and adaptation: survey resultsConclusions Main questions • Ordinal or special reactions? • Consciousness in corporate strategies or trial and error? • Which measures were effective?

  25. Topics  Hungary in a nutshell  Business situation and adaptation: survey resultsConclusions Measures examined • First survey: 18 measures • Afterwards: the 13 most common measures • Strategic measures • Seeking new markets • Launching new products • New strategic plan • Measures related to employment • Layoffs • Freezing or cutting wages • Shorter working hours • Other measures • Reducing receivables • Reducing dependence on suppliers • Reducing short-term debts • Government and EU benefits • Cost cutting measures • Postponing investments • Cutback of noncore services

  26. Topics  Hungary in a nutshell  Business situation and adaptation: survey resultsConclusions More variability in the first period • Average number of applied measures: • 2009 March: 5,5 • 2009 June: 5,6 • 2010 March: 5,8 • „All potential measures for surviving” 2014.06.10. 6:23 http://www.gvi.hu/ 26

  27. Topics  Hungary in a nutshell  Business situation and adaptation: survey resultsConclusions CCI by the the number of applied measures • Worse situation – more measures • Different measures? 2014.06.10. 6:23 http://www.gvi.hu/ 27

  28. Topics  Hungary in a nutshell  Business situation and adaptation: survey resultsConclusions Corporate responses: employment and strategic measures • Significance of seeking new markets • Less layoffs in 2010 • Shorter working hours rarely applied

  29. Topics  Hungary in a nutshell  Business situation and adaptation: survey resultsConclusions Corporate responses: cost cutting and other measures • Postponing investments and cutback of non-core services are also prevalent • Significance of government benefits is growing

  30. Topics  Hungary in a nutshell  Business situation and adaptation: survey resultsConclusions The most effective measures • Seeking new markets • Freezing wages

  31. Topics  Hungary in a nutshell  Business situation and adaptation: survey resultsConclusion Companies’ most effective measures and the CCI • Firms with higher CCI: government benefits, new products, new strategic plan • Lower CCI: cost cutting • Low case numbers

  32. Conclusion Topics  Hungary in a nutshell  Business situation and adaptation: survey results Conclusion • In an open economy like Hungary the crisis was driven mainly by narrowing of export markets. Credit crisis was secondary. • Exporting firms’ business situation worsened earlier but they also seem to recover earlier • Companies tried to apply many measures to minimize the unfavourable impacts of the crisis. Worse CCI – more measures. • Connection between CCI and type of most effective measure • Firms with worse situtation: cost cutting • Firms with better situation: strategic measures 2014.06.10. 6:23 http://www.gvi.hu/ 32

  33. Topics  Hungary in a nutshell  Business situation and adaptation: survey results Conclusions Further research • Further surveys – more data – higher case numbers • More complex analysis, methods • Following Hungarian firms’ situation and activity throughout the crisis

  34. Thank you for your attention!http://www.gvi.hu/ http://www.gvi.hu/

More Related