The impact of the COVID-19 pandemic on direct capital flows, The possible role of investment promotion (agencies)

Nagy Henrietta (2021) The impact of the COVID-19 pandemic on direct capital flows, The possible role of investment promotion (agencies). Külkereskedelmi Kar.

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Absztrakt (kivonat)

At the international level, the most recent crisis that has taken countries' economies back to such an extent was the 2008-2009 global economic crisis. The same can be said about the Visegrad countries and Hungary. However, coronavirus pandemic appeared much more abruptly and hit economies in 2020. A lot of companies had to shut down, including production and delivery of goods, as a lot of countries closed their borders. As a result, many countries have experienced and continue to experience unprecedented setbacks. Globally, the biggest downturns were in tourism and the service sector, although all sectors have felt the effects of the crisis to date. Looking at the Hungarian economy, it can be said that from 2010 there was an increase in terms of GDP. The biggest jump was from 2017 to 2019. The share of FDI in the GDP of the Hungarian economy is 67 percent, which is a large percentage. The most developed counties of Hungary are located in Central Hungary, Western Transdanubia, and Central Transdanubia (these regions have the highest share of foreign capital per capita), and these regions are much more favored by companies with foreign interests. Unfortunately, this increase was broken by the coronavirus pandemic, which resulted in a 10.7 % drop in GDP. The industrial performance fell 25% in the second quarter of 2020. Within this, the construction industry produced a 10%, tourism a 80% and the catering industry a 60% decline. The setbacks were larger than indicated by some forecasts. FDI plays a huge role in Hungarian GDP, but the same can be said of the Visegrad countries. FDI is most often competed between countries because new technology, capital, management, organizational knowledge, and market access enter the country through FDI. These tools help the economy and technological level of both developing and developed countries. However, in addition to its many positive features, FDI also has negative effects, such as the exclusion of domestic companies from the local market due to expanding companies, as large companies lose their workforce, place and opportunity to gain market position. In countries where FDI arrives, there are Investment Promotion Agencies (IPAs) that not only promote the country but also help investors, including what the country can offer them, what benefits it has, what support the project can receive. It is important for IPAs to build a relationship of trust with the company they want to invest in and notify them first hand about new informations. In addition, IPAs are also dealing with aftercare, which is not yet so mature as they tend to focus on new investments. In the V4 countries, the key sectors (automotive, business services (service centers), R&D, life sciences, renewable energy) are similar. Hungary, for example, prefers the automotive industry as well as electronics, while Poland prefers the steel industry and household appliances. In Hungary, the Ministry of Foreign Affairs and Trade has 3 background institutions, of which HEPA deals with export promotion and helps Hungarian companies to enter foreign markets. Eximbank occupies a special place within the domestic banking system. Eximbank is a specialized credit institution that provides financial services, ancillary financial services and investment services related to the export of Hungarian goods and services. HIPA’s goal is to make the country attractive to international economic actors in terms of investment location and to manage investment projects at the operational level. As we can see, in Hungary there is a separation between investment promotion and export promotion, which in many countries means only one institution. The pandemic differs from the global crisis in that it is affected all economies much more abruptly, as a result of which every government sought to take immediate action. Due to the closures, many companies in Hungary had to close down. As a result, GDP has fallen drastically and rapidly. As a result the Hungarian Government introduced economy protection measures aimed at retaining jobs, creating jobs, and supporting companies at a time when the company had to shut down due to the world pandemic. In addition, it launched various support programs with the help of Eximbank, Hipa and MNB. Of these, I would like to highlight the Subsidy to Increase Competitiveness (VNT), the aim of which is to keep jobs and create jobs. This support is now open for the third time, so it is a huge success. The long-term effects of this pandemic and what is yet to become people and the economy are unpredictable yet. There are a lot of things in question, we can only be informed from the data that has already happened. Perhaps the crisis of 2008-9 can give us guidance on what measures have worked that time, but it is absolutely not certain that this will happen, as we are now facing a completely different type of crisis, which we do not yet see the end. However, it is very encouraging, which several experts and OECD predicts will make recovery easier than it was in 2008-9.

Intézmény

Budapesti Gazdasági Egyetem

Kar

Külkereskedelmi Kar

Tanszék

Nemzetközi Gazdaságtan Tanszék

Tudományterület/tudományág

NEM RÉSZLETEZETT

Szak

Nemzetközi gazdálkodás

Konzulens(ek)

Mű típusa:	diplomadolgozat (NEM RÉSZLETEZETT)
Kulcsszavak:	beruházásösztönzés, COVID-19, hatásvizsgálat, promóciós ügynökségek, tőkeáramlás, világjárvány, visegrádi országok
SWORD Depositor:	Archive User
Felhasználói azonosító szám (ID):	Archive User
Rekord készítés dátuma:	2021. Szep. 21. 10:12
Utolsó módosítás:	2021. Szep. 21. 10:55

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