Regional specialisation in a transition country - Hungary



the central willingness? That is the spirit of the local bargain. If we attracting the value, that makes
concentration but whether in how proportions it means a structural changes, a specialisation.

Our research hypothesis was: How high level of regional specialisation and which sectors can be verify in
an advanced level transition country, like Hungary, enjoying permanent high FDI, commodity of
international trade to European Union is similar. Which variables are able to show this specialisation?

Overview of Hungarian growth

The attachment of the Hungarian economy to the growth area happened
gradually until 1996 and expanded from West to East. The process was market driven.
The multinational companies appeared at the end of 80thies and spread in masses in mid
of 90thies in the country, which was realised by relocation of the Western European
production to the area. The fact that the economy started to grow made it possible to
commence the closing up to Europe. Amongst others this tendency is indicated by the
fact that in Hungary the GDP/ capita - taken on the base of purchasing power parity -
between 1996 and 2000 rose from 47% of the average EU GDP to its 53%.

Right after the political and economic changes, the GDP/capita of the country
dropped sharply compared to the average GDP of the Union. Between 1992 and 1996
the indicator touched the bottom and stagnated. Afterwards however, the rate of growth
in the Hungarian economy was 2.5-3% bigger than in the economy of the Union every
year. It means that in the past four years in the Union the average annual growth of the
GDP was only 2.3% while in Hungary it was as high as 5.3%.

The economic growth went on parallel with the increase in productivity.
Hungary productivity in industry (1993-98) 61,1 real wage in industry 14,7 (Transition
Report 1999.) The driving force behind this upward trend has been fresh capital
investment accompanied by an inflow of improved technologies and modern
management methods and by positive developments in the area of product innovation.
The productivity of the whole economy increased averagely by more than 3% every
year in the 1990’s. This rate of increase is greater than the average in the European
Union, even bigger than in the southern periphery of the Union (in Spain, Portugal and
Greece). The economic growth, which started in the second half of the 1990's, was
based mainly on the foreign capital inflow and the export of the settling multinational
companies. In the past ten years Hungary has been successful in making the most of the
possibilities originating from the global growth in the volume of capital investments.

C:anyuwork/ace/ersa/paper01.07.2412:14



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