Reconsidering Adjustment Costs of the Association Agreement. The Case of Hungarian Food Industry

The structure of Hungary's food trade expansion over the transition period 1995-2003 and its implications for labour-market adjustment is examined. An econometric analysis of trade and employment data suggests that changes in domestic consumption and productivity have significant influence on employment changes. Market concentration has strong positive and significant effects, while FDI has no influence on the employment changes. Our results do not provide clear support for the smooth-adjustment hypothesis of intra-industry trade. However, our results should be interpreted only with care due to sensitivity on the choice of period and lag structure.Agribusiness,

The Dynamics of Trade in Central and Eastern European Countries

We describe the evolving pattern of Central European countries’ trade using recently developed empirical procedures based around the classic Balassa index. Despite significant changes in Central European economies during transition to a market economy, the distribution of the indices did not change radically over the 1990s. Our results suggest that the trade pattern converged in Czech Republic, Hungary, Poland and Slovenia, while it polarised in Estonia Latvia, Lithuania and Slovakia over the period. For particular product groups, the indices display greater variation. They are stable for product groups with comparative disadvantage, but product groups with weak to strong comparative advantage show significant variation. At the product level different development can be observed in the changes of trade specialization. The comparative advantages are still based largely on primary and natural resource intensive product groups in the Baltic countries, while CEE5 countries show a successful upgrading process in technological and human capital intensive products.international trade, revealed comparative advantage, Central Europe

Marginal Intra-Industry Trade and Adjustment Costs in the Hungarian Food Industry

Recent developments in intra-industry trade (IIT) literature focus on the relationships between IIT and adjustment costs associated with changes in trade pattern. The effects of trade liberalisation depend, inter alia, on whether trade is of an inter-industry or intra-industry nature. The belief that IIT leads to lower costs of factor market adjustment, particularly for labour, gives rise to the smooth-adjustment hypothesis Hungarian agricultural trade was liberalised via WTO agreement and some regional trade integration agreement (Association Agreement, CEFTA). It is reasonable assume that these partial trade liberalisation should have an effect on trade pattern and employment changes. The aim of the paper is to identify the effects of partial trade liberalisation on adjustment costs in Hungarian food industry employing recent developments in the IIT literature. The structure of Hungary's food trade expansion over the transition period 1992-2002 and its implications for labour-market adjustment is examined. An econometric analysis of trade and employment data suggests that changes in domestic consumption and productivity have significant influence on employment changes. But our results do not provide support for the smooth-adjustment hypo thesis of intraindustry trade.intra-industry trade, adjustment costs, food industry, Marketing, Q17,

Is There a Consensus among Agricultural Economist?

The paper investigates the consensus among Hungarian agricultural economists on specific propositions on the basis of a 2004 survey using a consensus index. In comparison to previous studies of agricultural economists much more diverse found among agricultural economists. In contrast to earlier studies, we have no found evidence of a difference between positive and normative propositions. The results suggest that personal characteristics of agricultural economists, like age, occupation, educational background may have influence on the pattern of responses. We also found some support to the role of positive and normative influences on policy judgement.agricultural economists, consensus, Teaching/Communication/Extension/Profession, A11,

Impact of Off-farm Income on Farm Efficiency in Slovenia

The paper investigates the impact of off-farm income on farm technical efficiency for the Slovenian Farm Accountancy Data Network farms in the years 2004-2008. Farm stochastic frontier time-varying decay inefficiency is positively associated with total utilised agricultural areas and total labour input, and vice versa with intermediate consumption and fixed assets. We find a positive association between farm technical efficiency and the off-farm income. Farm technical efficiency has increased steadily over time, the process, which was led by the off-farm spill over effect and most efficient farms. Farm technical efficiency is also positively associated with economic farm size, while association with subsidies is mixed depending on the estimation procedure. Quantile regression confirms the positive and significant associations between farm technical efficiency and off-farm income, and between farm technical efficiency and farm economic size, as well as also the positive association between farm technical efficiency and subsidies, but the results are sensitive by quantiles.Off-farm income, Stochastic frontier analysis, Panel regression, Quantile regression, Slovenia, Farm Management,

THE CHOICE BETWEEN CONVENTIONAL AND ORGANIC FARMING – A HUNGARIAN EXAMPLE

The organic agriculture represents a promising alternative for the future of European agriculture. It is consistent with the notion of sustainable development set forth already in the 1992 CAP Reform. Despite of increasing importance of organic farming, the research on organic farming is still limited. This scarcity of the research is especially true for New Member States of the enlarged EU. This paper investigates the choice between conventional and organic production technologies for individual farmers in Hungarian agriculture. We apply a model that explicitly accounts for the effects of farm-specific variables like age and education on the expectations farmers have on the utility of both production technologies. In addition we take into account the perceptions of farmers about the organic farming. The model was estimated on a cross-section data set of Hungarian farmers for the period 2007 using a logit specification. It appears that education has a positive impact on the choice between conventional and organic farming, and, the size of the farm in hectares has a negative effect on this choice. Age and some general considerations on environmental friendly technologies do not have a significant effect on choice between conventional and organic farming.Innovation, Attitudes, Organic production, Diffusion, Agribusiness, Crop Production/Industries, Food Consumption/Nutrition/Food Safety,

The Choice of Farm Organization. A Hungarian Case

The literature on the agricultural transformation in Central an Eastern European countries usually neglect the investigation of organizational forms in agriculture. This paper is the first to analyze the choice of organization forms in transition agriculture employing transaction cost theory. The analysis is based on Hungarian FADN data in 2003. In general, our results do not support the theoretical predictions on the choice of farm organization, but confirm the differences in capital level and farm area observed in different farm organizations. The divergence between theory and empirics shed light on the importance of path dependency in explaining of farm organizations.Farm Management,

Comparative advantages and competitiveness of Hungarian and Slovenian agro-food trade in the EU markets

The paper investigates comparative advantages and competitiveness of Hungarian and Slovenian agro- food trade in the EU markets. Applying a highly disaggregated trade dataset, we describe the pattern of agro- food trade in Hungary and Slovenia using the Balassa index. The extent of trade specialization exhibits a declining trend. Both countries have lost comparative advantage for a number of product groups over time. The indices of specialization have tended to converge. For particular product groups, the indices display greater variation. They are stable for product groups with comparative disadvantage, but product groups with weak to strong comparative advantage show significant variation. The price competition, quality competition and the one- way trade are also analyzed using extended [1] approach. In Hungarian matched two- way agro- food trade the prevalence is on successful price competition and on successful non- price or quality competition suggesting comparative advantages for Hungarian agro- food product s vis- àvis bilateral trading partners. In Slovenian matched two- way agro- food trade the prevalence is on the non- successful price competition and on the non- successful quality competition suggesting comparative trade disadvantages vis- à- vis bilateral trading partners .Comparative Advantage, Price Competition, Agro- Food Trade., International Relations/Trade,

Competition and Dynamics in Trade Patterns: Hungarian and Slovenian Agri-Food Trade with the European Unions' Trading Partners

Trade balances and unit values in Hungarian and Slovenian bilateral agri-food trade with Austria, Germany and Italy, respectively, to distinguish types of the one-way and the two-way trade flows, categories of price competition and categories of quality competition in the twoway trade flows, their dynamics and stability over time are analyzed. The two-way matched trade flows prevail among trade types. In the matched two-way bilateral agri-food trade there is prevalence of categories of price competition over categories of non-price competition, but varies across trading partners. In Hungarian agri-food trade the first category of successful price competition and the third category of successful non-price or quality competition prevail, suggesting comparative advantages for Hungarian agri-food products vis-a-vis bilateral trading partners. In Slovenian agri-food trade the prevalence is on the second category of non-successful price competition and on the fourth category of non-successful quality competition suggesting comparative trade disadvantages vis-à-vis bilateral trading partners. Looking dynamically, we did not find comparative catch up as for Hungary both successful price and successful non-price competition increased only with Austria, but deteriorate with Germany and Italy. For Slovenia, successful price and successful non-price competition remains at similar level with Austria, but similar as for Hungary, they declined with Germany and Italy. The probability of remaining the one-way trade is greater than the probability to stay within the same competition category in the two-way matched trade. While there are differences across countries, products, and over individual years, the mobility indices indicate the decline in mobility in trade flows. If these patterns continue, then more stable trade patterns are expected.Competition, trade types, dynamics, mobility index, F12, Q17, Q18, International Relations/Trade,

Marketing and pricing dynamics in the presence of structural breaks - the Hungarian pork market

The study of marketing margins and price transmission on various commodity markets has been a popular research topic of the past decades (see MEYER, VON CRAMONTAUBADEL, 2004, for a recent survey), however with a few exceptions these studies focused on developed economies. In this paper we examine the above phenomena on the: Hungarian pork market. The Johansen (maximum likelihood) or Engle and Granger (two step) cointegration tests do not reject the no-cointegration null hypothesis between the Hungarian pork producer and retail price series. Therefore we apply the Gregory and Hansen procedure with recursively estimated breakpoints and ADF statistics, and found that the prices are cointegrated with a structural break occurring in April 1996. Exogeneity tests reveal the causality running from producer to retail prices both on long and short run. Homogeneity tests are rejected, suggesting a mark-up pricing strategy. Price transmission modelling suggests that, price transmission on the Hungarian pork meat market is symmetric on the long, but asymmetric on the short-run, i.e. processors, wholesalers or retailers might take temporary advantage should price changes occur.price transmission, marketing margin, pricing, structural breaks, Hungarian pork market, Demand and Price Analysis, Marketing,