Foreign Direct Investment in the Hungarian food sector

Jansik, Csaba (2000) Foreign Direct Investment in the Hungarian food sector. Hungarian Statistical Review, 78 (SN4). pp. 78-104. ISSN 0039-0690

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Abstract

Hungary has been a popular target for foreign investments since the beginning of political and economic reforms. The country has received one-fourth of total FDI inflows that arrived to the Central and Eastern European region. Food processing was one of the first sectors to be privatised in Hungary. Foreign investors have participated very actively in the process since 1990. The share of foreign ownership in the Hungarian food processing sector exceeded 60 percent by 1997. The main objective of this study is to analyse the major determinants that resulted in an uneven distribution of FDI among the seventeen individual food processing industries in Hungary. The factors that attracted large amount of foreign investment into certain food industries are searched by a regression model and cluster analysis. The paper also includes illustrative case studies of three food processing industries. The study reviews the fears previously associated with foreign ownership in the food sector; then it weighs them against the results achieved by 1999. Hungarian food industries have accumulated a great deal of experience concerning foreign investments over the period of nearly ten years. The assessment analysis of this experience provides the Hungarian agri-food sector, foreign investors, and Central and Eastern European countries with valuable future reference.

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