The transition times of the banking system in South-eastern Europe

The paper analyses the commercial banking sector's development in southeastern Europe during the transition period. The transition of the banking sector evolved - or is still evolving - parallel with the general economic transition. However, due to its complexity and the widespread factors that influence its activity, its development was a slow and gradual process with occasional systemic meltdowns. The paper proves that despite the different legacies, initial condition, applied economic policies, and historical events, the banking sector's structure became similar in all country cases by the end of the transition period. This similarity could be explained by the mutual challenges and the financial globalisation.

Centre-periphery tensions regarding Central and Eastern Europe

Security issues have played an important role in widening the European Union with eight Central and Eastern European economies. The time since have proved these concerns to be correct. The present North-South tension within the Euro-zone highlights even more the West-East tensions inherent in the international relations since the Eastern enlargement. Various divisions – political and economic alike – have already been felt throughout the whole period of 2004-20122 (Balázs, J.1985, 1993, 1995, 1996). The worldwide economic crisis of 2008, however, has revealed even more the hidden tensions in these relations. The political events after the 2010 election in Hungary, those in Romania in 2012, the continuous anti-EU declarations of the Czech president present ample evidence to the fact: the enlargement has been based more on political wishes and will than on firm economic reasoning. The outcome is constant struggle between the parties to keep face and save the state of the European Union. Ongoing political and economic struggles around Greece, Portugal and Spain are other forms of fundamental problems within the European Union. It is worthwhile, hence to study the almost forgotten centre – periphery relations in this respect.

A közép-kelet-európai bankfúziók eredményessége (The success of the bank mergers in Central Eastern Europe)

Az elmúlt években a nagy európai bankcsoportok egyre több közép-kelet-európai bankot vásároltak fel. Tanulmányunkban a bankfúziók értékteremtő hatását részvényesi szemmel elemezzük. A közép-kelet-európai régióban tevékenykedő hét legnagyobb bankcsoport 2000 és 2008 közötti akvizíciós tranzakcióit az eseményelemzés módszerével vizsgáljuk. Úgy tűnik, a részvényesek összességében értékelik a bankcsoportok akvizíciós törekvéseit: a fúziók kicsit több mint felében pozitív a kumulált abnormális hozam, és enyhén pozitív az összes esemény abnormális hozamának átlaga is. Számításaink során elsőként az egyes bankcsoportok felvásárlási stratégiáját értékeljük. A felvásárlás bejelentése körüli háromnapos időintervallumot alapul véve, a Raiffeisen és az OTP stratégiája tekinthető a legsikeresebbnek, míg az Erste felvásárlásai a legkevésbé eredményesnek. Ezt követően rávilágítunk arra, hogy eltérő befektetői szándékból ugyan, de mind a legmagasabb, mind a legalacsonyabb értékű ügyletek esetében a pozitív abnormális hozamú fúziók vannak túlsúlyban. Végezetül megállapítjuk, hogy az országhatáron átívelő ügyletek befektetői megítélése nem rosszabb az országhatáron belüli tranzakciókénál. /===/ The big European banking groups have been buying up more and more banks in Central Eastern Europe. The study analyses the value-enhancing effects of the mergers from the shareholder’s angle by examining by occurrence analysis methods the Central East European acquisition transactions of the seven biggest banking groups between 2000 and 2008. The shareholders as a whole seem to appreciate the acquisition activity of the banks: cumulative abnormal yield is positive in over half the mergers and average abnormal yield of all occurrences is mildly positive as well. The authors evaluate first the acquisition strategies of each banking group. Based on a three-day period round the acquisition announcement, Raiffeisen and OTP seem to have the most successful strategies and Erste the least successful. Light is then shed on investment intentions in each case, but mergers with a positive abnormal yield predominate among the highest and the lowest value transactions. Finally, the investor evaluation of cross-border transactions is no worse than for domestic ones.

Fiscal and Monetary Institutions in Central, Eastern and South-Eastern European Countries

This paper studies the role of fiscal and monetary institutions in macroeconomic stability and budgetary control in central, eastern and south-eastern European countries (CESEE) in comparison with other OECD countries. CESEE countries tend to grow faster and have more volatile output than non-CESEE OECD countries, which has implications for macroeconomic management: better fiscal and monetary institutions are needed to avoid pro-cyclical policies. The paper develops a Budgetary Discipline Index to assess whether good fiscal institutions underpin good fiscal outcomes. Even though most CESEE countries have low scores, the debt/GDP ratios declined before the crisis. This was largely the consequence of a very favourable relationship between the economic growth rate and the interest rate, but such a favourable relationship is not expected in the future. Econometric estimations confirm that better monetary institutions reduce macroeconomic volatility and that countries with better budgetary procedures have better fiscal outcomes. All these factors call for improved monetary institutions, stronger fiscal rules and better budgetary procedures in CESEE countries.

Exchange Rate Policy and Economic Growth after the Financial Crisis in Central and Eastern Europe

In a paper on the effects of the global financial crisis in Central and Eastern Europe (CEE), the author reacts to a paper of Åslund (2011) published in the same issue of Eurasian Geography and Economics on the influence of exchange rate policies on the region’s recovery. The author argues that post-crisis corrections in current account deficits in CEE countries do not in themselves signal a return to steady economic growth. Disagreeing with Åslund over the role of loose monetary policy in fostering the region’s economic problems, he outlines a number of competitiveness problems that remain to be addressed in the 10 new EU member states of CEE, along with improvements in framework conditions supporting future macroeconomic growth.

Spillovers from Foreign Direct Investment in Central and Eastern Europe. An index for measuring a country’s potential to benefit from technology spillovers

In the paper, we construct a composite indicator to estimate the potential of four Central and Eastern European countries (the Czech Republic, Hungary, Poland and Slovakia) to benefit from productivity spillovers from foreign direct investment (FDI) in the manufacturing sector. Such transfers of technology are one of the main benefits of FDI for the host country, and should also be one of the main determinants of FDI incentives offered to investing multinationals by governments, but they are difficult to assess ex ante. For our composite index, we use six components to proxy the main channels and determinants of these spillovers. We have tried several weighting and aggregation methods, and we consider our results robust. According to the analysis of our results, between 2003 and 2007 all four countries were able to increase their potential to benefit from such spillovers, although there are large differences between them. The Czech Republic clearly has the most potential to benefit from productivity spillovers, while Poland has the least. The relative positions of Hungary and Slovakia depend to some extent on the exact weighting and aggregation method of the individual components of the index, but the differences are not large. These conclusions have important implication both the investment strategies of multinationals and government FDI policies.

Social change in Central and Eastern Europe: General trends and national patterns

The paper addresses five issue areas. First it describes the plurality of trajectories in central and eastern European transformations, offering a broad typology. Then it addresses the drift between acceptance of democracy and the market, owing to growing inequalities. Third, problems of poverty and exclusion are addressed. Fourth, it is addressed if any known model of redistribution emerged in the post-transition economies. Fifth, consequences of the populist turn in European policies are being analyzed. Influences of the EU practices will be dealt with and some preliminary conclusions drawn. These suggest a strong intertwining between social and economic performance that limit theoretically conceivable – neoliberal, social democratic, postmodern or conservative - policy choices.

A jelzálogpiaci válság és a Közép-Kelet-Európában aktív nagybankok részvényárfolyama (The impact of the subprime crisis on the banks being active in Central and Eastern Europe)

Tanulmányunkban azt vizsgáljuk, hogy a jelzálogpiaci válsághoz köthető hírek milyen hatással vannak a Közép-Kelet-Európában aktív nagybankokra. A vizsgálathoz tíz Közép-Kelet-Európában aktív, tőzsdei nagybankot választottunk ki, amelyek közül hat nyugat-európai, míg négy közép-kelet-európai székhelyű bank volt. A tíz pénzintézettel kapcsolatosan 128 hírt gyűjtöttünk össze a 2007. június 1. és 2009. december 31. közötti időszakból. A híreket öt kategóriába csoportosítottuk, és az egyes kategóriáknak a részvényárfolyamokra gyakorolt, rövid távú hatását külön vizsgáltuk. Számításaink alapján a jelzálogpiaci válság során a befektetők pozitívan fogadták az állami feltőkésítéssel kapcsolatos bejelentéseket és a kielégítő védelmet nyújtó, átfogó kormányzati bankmentő csomagokat. A veszteségekkel, a leminősítéssel és az ECB intézkedéseivel kapcsolatos hírek esetén rövid távon nem tudtunk szignifikáns hatást kimutatni. A kutatás során a hírek számosságában igen, de a hírek által kiváltott hatás nagyságrendjében nem észleltünk jelentős különbséget a nyugat-európai és a középkelet- európai bankok között. ______ The research measures the impact of the subprime crisis on the shareholders of the banks being active in Central and Eastern Europe. The analysis focuses on the ten largest banks of the region measured by the asset size. The authors address the question whether the crisis affected more signifi cantly the large banks headquartered in Western Europe or the banks domiciled in Central and Eastern Europe. With the aim of capturing the short-term impact of various news on the shareholders of the banks, the popular event-study methodology with a one-day event window is employed. Within the period of 1 June 2007 and 31 December 2009, altogether 128 news were collected and grouped into fi ve categories (downgrades, loss, capital strengthening, governmental rescue packages, interventions of the ECB). Among others, the authors found empirical evidence that the shareholders appreciated the interventions of the governments: their capital injections resulted in signifi cant positive abnormal returns. Governmental rescue packages also resulted in signifi cant abnormal returns in the share price, however, the sign of the returns was unambiguous. No empirical evidence was found that in the short run the news in connection with loss announcements, downgrades and ECB interventions resulted in signifi cant abnormal returns. We concluded that although Western European banks and banks domiciled in Central and Eastern Europe differed in the number of news announced, the crisis affected the banks in both regions in a similar manner.

Gender, Work and Employment in Ten Candidate Countries of Central and Eastern Europe. Final Report. Country: Hungary

The Hungarian media shows very contradictory pictures of women today: Successful career women enjoying material well-being is one picture, while the careful mother not working outside the home, keeping together the family is another one. Between these two contradictory poles there are almost no other female actors in the media. Life produces something different. In spite of the fact that there was a big loss of jobs in 1990s, and women’s activity rate decreased while the unemployment rate increased compared to before the 1990s, woman with duel roles are still accepted and common. The first female task is looking after the family and the second one is working outside the home and earning money. In many cases there is a third role: studying in distant or evening courses. In the next chapters we go deeper into this topic. We analyse the different aspects of female labour market positions, and show some relevant characteristics of governmental parental benefits and childcare support, and examine how the new pension system effects women. We also have a quick look at trade unions and show their lack of activity around gender issues. In the labour market analysis of the position of women we use labour force surveys, institution-based labour statistics, and unemployment registers. The Appendix 1 contains short descriptions of these data sources.

“An Ebbing Tide Lowers all Boats” How the great recession of 2008 has affected men and women in Central and Eastern Europe

In this paper we explore the impact of the economic recession of 2008 on gender inequality in the labor force in Central and Eastern European countries. We argue that job and occupational segregation protected women’s employment more than men's in the CEE region as well, but unlike in more developed capitalist economies, women’s level of labor force participation declined and their rates of poverty increased during the crisis years. We also explore gender differences in opinions on the impact of the recession on people’s job satisfaction. For our analysis we use published data from EUROSTAT and our own calculations from EU SILC and ESS 2010.

Measuring Benefits of Technology Spillovers from Foreign Direct Investment in Central and Eastern Europe

In this paper, we construct a composite indicator to estimate the potential of four Central and Eastern European countries (the Czech Republic, Hungary, Poland and Slovakia) to benefit from productivity spillovers from foreign direct investment (FDI) in the manufacturing sector. Such transfers of technology are one of the main benefits of FDI for the host country, and should also be one of the main determinants of FDI incentives offered to investing multinationals by governments, but they are difficult to assess ex ante. For our composite index, we use six components to proxy the main channels and determinants of these spillovers. We have tried several weighting and aggregation methods, and we consider our results robust. According to the analysis of our results, between 2003 and 2007 all four countries were able to increase their potential to benefit from such spillovers, although there are large differences between them. The Czech Republic clearly has the most potential to benefit from productivity spillovers, while Poland has the least. The relative positions of Hungary and Slovakia depend to some extent on the exact weighting and aggregation method of the individual components of the index, but the differences are not large. These conclusions have important implications both for the investment strategies of multinationals and government FDI policies.

Innovation Management in Central and Eastern Europe: Technology Perspectives and EU Policy Implications

The purpose of this study is to investigate empirically the role of innovation activity in Central and Eastern Europea (CEE). We also identified those internal and external factors, which might cause improvements in innovation performance of CEE companies. Our main focus was on technology-based innovations within the healthcare industry. We applied qualitative research methods. Our findings demonstrate that CEE companies within the healthcare industry have significant contribution to European Union’s innovation performance. We found that key success factors of these organizations are based on four elements: knowledge management, access to financial resources, managing formal and informal networks, as well as achieving synergies between technological and non-technological innovations.

Knowledge and innovation as value drivers in professional services firms: an empirical research in Central and Eastern Europe

The purpose of this study was to investigate empirically the role of knowledge and innovation within Central and Eastern Europe’s changing economy. We applied qualitative research methods, and focused only on professional services firms within the region. The connection between knowledge and innovation as well as knowledge and competitiveness was analyzed by top managers and senior industry experts. Our findings revealed that knowledge might be a real value driver for professional services firms. These companies can significantly contribute to the development of modern economies through the dissemination of their internal best practices in knowledge management. We found three factors that might influence the effectiveness of knowledge management. These three factors are the involvement of international knowledge networks, the investments in human capital, and focus on critical resources. These issues proved to be essential to maximize the potential of knowledge and to leverage this into increased business performance.

A munkával kapcsolatos értékek és attitűdök változása Közép-Kelet Európában a XXI. század első évtizedében (Changing values and attitudes regarding labour in Central- Eastern Europe in the first decade of 21st century)

A szerző tanulmányában a 2000 és 2010 közötti gazdasági és társadalmi változásokat és a munkával kapcsolatos értékek és attitűdök alakulását állítja időbeli párhuzamba, és azokra a kérdésekre keresi a választ, hogy milyen prioritások jellemzik 2010-ben a munka egyes aspektusaihoz való viszonyulást Közép-Kelet- Európa uniós tagállamaiban, és közöttük kiemelten Magyarországon? Vajon változtak-e ezek a jellemzők az elmúlt tíz év során, s ha igen, milyen irányú az elmozdulás. Azonos tendenciájúak-e a változások a vizsgált országokban? Megállapíthatók-e jellegzetes különbségek három kiválasztott, magas életszínvonalú, régebbi uniós (EU-15) tagországhoz viszonyítva? Elemzése jelentős mértékben támaszkodik az EVSfelmérés 2010-ben közzétett adataira, melynek alapját a 2008 és 2009 során lefolytatott adatgyűjtés képezi. Tanulmányában azokra a közép-kelet-európai országokra összpontosít, amelyek az elmúlt évtized során az unió tagjai lettek, és a 2000-es felmérésben is részt vettek már. _____ The author sets into parallelism economic and social changes and the development of values and attitudes regarding labour between 2000 and 2010, and looks for answers to questions what priorities characterize in 2010 the attitude to some aspects of labour in EU member countries of CEE, and especially in Hungary. Have these features changed in the last decade and in positive case, what is the direction of the shift? Are changes of similar tendency in countries under consideration? Can considerable differences be stated as compared to three selected, earlier EU 15 member countries with high living standard? The analysis largely relies on data of EVS survey, published in 2010 whose basis is the data collection carried out in 2008-2009. The essay focuses on Central Eastern European countries which have become members of the Union during the last decade and took part already in the survey of 2000.