Institutions, Entrepreneurship & Economic Development

The research topic ‘Institutions, Entrepreneurship and Economic Development’ aims to understand the private and public institutional environment of doing business in Hungary and Central Europe. Our efforts focus on both the qualitative and quantitative analysis of the business environment using the methodology and perspective of economics, sociology and political science. We offer realistic private/public policy solutions to make Central European businesses more able to create value, more cooperative and more open to innovation.

Our Approach

We see the world as one organized by institutions. We pursue our research with the assumption that the realms of politics, business and society are not independent from each other. They are phenomena of an interdependent network of people and private and public organizations where all actors carry out their actions based their interests, incentives, values, experiences and expectations.

Building on this foundational perspective, our researchers focus on several different problems. What must the government do to enhance competitiveness? How could we reduce the administrative burden on the economy? What are the non-governmental institutions that may create opportunities for companies to get more competitive? What are the special features (obstacles and opportunities) of a post-communist government and society in terms of competitiveness? What is the role of SMEs in a competitive economy? How is it adequate to conceptualize innovation in an economy on the semi-periphery of the Western world?

Leading Researchers

Balázs SZEPESI, Károly MIKE


1. Communal Competitiveness

Building on almost ten years of research, HETFA offers a new, more qualitative conceptualization of competitiveness. Focusing on the underlying motives behind competitive behaviour, competitiveness means actions that create value as a result of cooperation and that are open to innovation. Using this concept, it is possible to assess the competitiveness of people, organizations, companies, nations in a unified analytical framework.

Related publications:

Czaller, László  (2017) Increasing social returns to human capital: evidence from Hungarian regions, Regional Studies, ISSN: 0034-3404 

Major, Klára – Drucker, Luca Flóra (2015): Macroeconomic impact of electric power outage – simulation results from a CGE modelling experiment for Hungary, HETFA Working Paper Series No. 12

Mike, Károly (2015): Where should the road of the Hungarian capitalism lead? [Merre vezessen a magyar kapitalizmus útja?], HETFA Working Paper Series No. 10. Brief English summary is available

Szepesi, Balázs (2012): The Social Environment of Competitiveness [A versenyképesség társadalmi környezete], Institute of Business Economics, Corvinus University of Budapest.

Balás, Gábor – Csite, András – Szabó-Morvai, Ágnes – Szepesi, Balázs (2010): Trust and Entrepreneurship in Hungary – Starting Points [Bizalom és Vállalkozás Magyarországon – Kiindulópontok]. HÉTFA Working Papers No. 2.  Brief English Summary is available

2. Sociology of Business and Entrepreneurship

Economic activity is carried out by persons and is in fact an interpersonal endeavour. Thus, interpreting business as a social phenomenon gives way to a deeper, richer understanding.

Related publications:

Bobák, Fanni – Geambaşu, Réka -Radnai, Zsuzsa -Zsár, Virág (2017): Female entrepreneurs – women in enterprises: Motivation, work-life balance, challenges, HÉTFA Working Papers No. 2017/27, Budapest

Császár, Melinda – Horváth, Gergely Krisztián: Soul, Value, and Strategy. About the Basic Dimensions of Entrepreneurial Existence [Lélek, Érték, Stratégia – A vállalkozói lét alapdimenziói] HETFA Working Paper No. 5. Brief English Summary is available

Csite, András – Luksander, Alexandra – Mike Károly (2012): The Character of the European Entrepreneur [Az európai vállalkozó karaktere]. Vezetéstudomány (Management Science), 42, Special Issue on Business Competitiveness, 4-13

Pocsarovszky, Ráchel (2011): Doing Business in the Balkans, Hetfa Research Background Paper No. 6, Budapest, ISBN 978-963-89112-1-6

Csite, András (2008): Unhappy Capitalism? On Some Traits of the Value Preferences of Contemporary Hungary [Boldogtalan kapitalizmus? A mai magyarországi társadalom értékpreferenciáinak néhány jellemzője]

3. Operation of the State

The state provides the formal institutions among which businesses operate. Thus, one of the key factors in the competitiveness of an economy is how well these institutions operate. A good conceptualization of the problems of the formal institutions gives way to applicable policy recommendations.

Related publications:

Szepesi, Balázs – Borbás, Gabriella – Balás, Gábor (2010): Problems of the Functioning of the State in Hungary. Theoretical and methodological research frames [Az államműködés problémái Magyarországon. Elméleti, módszertani keretek az államműködés problémáinak vizsgálathoz]

4. SME Policy

Being the biggest employers, SMEs are the backbone of the economy. Their opportunities and obstacles are therefore crucial – HETFA is committed to work for a wide understanding of these opportunities and obstacles, again with the goal of helping policy-makers develop policy instruments that enhance the growth of small and medium enterprises.

Related publications:

HÉTFA – Ernst & Young Tanácsadó Kft. (2010): “Development strategies of small- and medium enterprises (2007-2013)” – intermediate evaluation. [„A kis- és középvállalkozások fejlesztésének stratégiája (2007-13)” közbenső értékelés] Brief Introduction in English is also avaiable

5. Administrative Burden on the Economy

One of the key problems of all European economies, especially that of Hungary, is the substantial amount of administrative burden. Although reducing ’red tape’ is a noncontested goal among politicians and policy-makers, the actual ways of achieving this goal is not straightforward. HETFA is committed to help policy-makers with pragmatic solutions.

Related publications:

Bognár, Fruzsina – Szabó-Morvay, Ágnes (2011): Administrative burdens of employment in Hungary [A foglalkoztatással kapcsolatos adminisztratív terhek Magyarországon]. HETFA Working Paper No. 7.

6. Business Organizations, Local Cooperation, Self-Governance

A free and prosperous economy can’t live without strong and autonomous organizations and local cooperation. HETFA aims to analyze the successes and mistakes of the past to help future cooperative endeavors with experience.

Related publications:

Major, Klára -Szabó, Tamás (2017): Credit capacity of Hungarian firms, HÉTFA Working Papers No. 2017/23, Budapest, ISSN 2062-378X

Mike, Károly – Kiss, Gábor (2017): Beyond the Informal/Formal Divide: How do Firms Combine Contract-enforcement Institutions?, HÉTFA Working Papers No. 2017/21, Budapest, ISSN 2062-378X

Pocsarovszky, Ráchel (2011): Doing Business in the Balkans, Hetfa Research Background Paper No. 6, Budapest, ISBN 978-963-89112-1-6

Jakab, Julianna (2010): Lessons learnt from entrepreneurial cooperation [Egy vállalkozói együttműködés tanulságai] (Available only in Hungarian)

Kabai, Gergely (2010): „Az átutalásos fizetést már nem alkalmazzuk” A Balaton környéki borászok gazdálkodásának és együttműködésének helyzete, Gazdasági érdekképviseletek és kamarák zárótanulmány In: Jakab Julianna – Kelemen Eszter – Megyesi Boldizsár – Kabai Gergely: Bizalom és Vállalkozás Program, Széljegyzet. Budapest, 2010. (Available only in Hungarian)