Eszterházy Károly College Faculty of Natural Sciences
According to the situation analysis of small and medium-sized companies development strategy 2007-2013 issued by the former Ministry of Economy and Transport 40 percent of businesses companies is in the Central Hungary region, mainly in Budapest. The role of the central region is outstanding regarding the number and the distribution of firms operating in the region in terms of income, performance and other economic and social indicators. If we examine the rural areas without the central region it can be observed that small businesses companies generate less widely spread income that large enterprises. The difference between added value per capita in the most and the least developed regions of the country shows that the difference in case of large enterprises is almost fourfold, while the difference in case of small and medium-sized companies is more than one and a halffold. This means that in the development and maintenance of regional economic disparities large enterprises have a greater role. Small-and medium-sized companies generate more equal income.
Not only the number of businesses companies but also their density is greater in the central region. It can be observed that the density of business companies and economic development occur in parallel. In the Transdanubian regions the density of business companies is higher, and lower in the Great Plain regions.
Figure 22. Some statistical figures of business companies in 2005, according to regions (Source: Demography of Enterprises - CSO 2006)
25 to 42 percent of the added value is created by micro and small companies, 17 to 29 percent and 30 to 55 percent added value is created by medium-sized and large enterprises. In other words, the large enterprises have the largest dispersion. The value-added contribution of micro and small companies in production are higher than average in the following regions: Southern Plains, Northern Great Plain, Southern Transdanubia, Western Transdanubia.
Figure 23. The distribution added value by the number of employees by region in 2005 (%) Source: Computation based on tax returns
The average productivity of the companies are relatively close to each other. An employee produce revenues of an average of 22 milion HUF at the micro-and small companies, 21 million HUF at the middle sized companies and 30 million HUF at the large enterprises. (Figure 24). The differences are not very large. Regionally, the index of the Central Hungary, Central Transdanubia, Western Transdanubia region, and significantly higher than in other regions. The difference is one and a half to twice. We observed remarkable differences during employee headcount. (Figure 23). The sizes of business companies can vary widely, but they do not strictly follow the regional differences. In the Central Hungarian region micro and small companies and medium-sized companies’ productivity is greater than large enterprises’. This phenomenon does not occur in any other region. In other regions, the productivity of enterprises is greater. The productivity gap between enterprises, micro and small companies is the largest in the Central Transdanubia and Western Transdanubia region, (quotient is twofold, triple). In other regions this quotient is much more balanced.
Figure 24. Revenue per employee by the number of employees by region in 2005 (in thousand) (Source: Development strategy of small and medium-sized companies 2007-2013)
Figure 25. Number of businesses companies by region Source: Demography and structure of business companies (2000-2009)
Figure 25 shows the evolution of the number of domestic business companies from 2000 until 2009. This period and the entire Hungarian economy and society was affected by two significant changes. The first one was Hungary's accession to the European Union in 2004. The second was the global economic and financial crisis starting in 2008. The balance of forming and ceasing of business companies is unfortunately negative in the longer terms, so the total number of business companies is slightly decreasing. In the long run, further significant reduction in the number of business companies in the Hungarian economy is unlikely. More likely, their number will slightly decrease due to the unfavorable economic vision. During the entire test section, the Central Hungarian region had approximately one-quarter reduction in the number of businesses companies. Throughout the whole Transdanubia over the nine years, more than 27 per cent of the business companies were drop-out. Even in Northern Hungary and the Great Plain regions nearly 30 percent of business companies are characterized by erosion.
The regional headquarter distribution of business companies (1999) has remained almost unchanged since the first survey in 1999 (Figure 26). In 2010, the share of Central Hungary was 40.1%. In the other regions, this ratio ranged from 8.5 to 11.5 percent. Central Hungary’s outstanding position is due to the extremely high number of business companies, which can be explained by the country's main urban-centered economy and adequate infrastructure. More than half of the corporate businesses was registered in the Central Hungarian Region.
The regional distribution of Individual companies is much more balanced. Central Hungary has 26% share. While the other regions have share from 10.3 to 14.5 percent. In 2010, in the majority of counties and regions the number of business companies increased, except only one region (North Hungary: -0.3%) and three counties Nógrád county (-2.5%), Jász-Nagykun-Szolnok county (-1%) and Heves county (-0.5%). In contrast, th largest increase was in Pest County (2.2%).