Comparative Analysis of Financial Market Development in the Democratic Republic of Congo and Hungary

Ngamba, Divin Eyir and Malatyinszki, Szilárd and Kálmán, Botond Géza (2023) Comparative Analysis of Financial Market Development in the Democratic Republic of Congo and Hungary. In: XV. Pécsi Pénzügyi Napok : I. Pénzügy és Számvitel Nemzetközi Tudományos Konferencia = XV. Finance Days in Pécs : I. Finance and Accounting International Scientific Conference. Pécsi Tudományegyetem Közgazdaságtudományi Kar, Pécs, pp. 119-128. ISBN 978-963-626-211-2

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Abstract

Purpose: We compare the competitiveness of two countries, namely, Hungary and the Democratic Republic of Congo, to observe their productivity, with a focus on financial market development, since business investment is a crucial factor thereof, today when financial markets’ prevailing rules determine the success of capital exposure for investors of the private sector. Methodology: In our statistics, we rely on the data from the Global Competitiveness Reports of the World Economic Forum, in addition to a broad comparison of literature review. To establish geographical differences, we do a regional review, with the insight to the specificities of East-Central Europe and Sub-Saharan Africa. Due to the clear-cut difference between the bases of the Global Competitiveness Indices (GCI) from 2017, we are compelled to scrutinise the periods before and afterwards separately, in terms of descriptive statistics, correlations, t-tests and ANOVA. Results: Congo’s competitiveness indices fall short of Hungary’s, and, even if all competitiveness pillars are interrelated, we expect to demonstrate the key importance of financial market development in the determination of the two country’s competitiveness positions. Regression will show a more rapid improvement in venture capital availability and the ease of access to loans for Hungary during the past decade. ANOVA will show how much the geographical location (Sub Saharan and East Central European) of the two observed countries is a determinant factor in the outcome of their difference in competitiveness. Conclusions: Due to affordable financial services in Hungary, a more favourable legislation, its peculiar international environment (gate to West, bridge towards Turkish and Russian influence and capital, membership in the EU), and its attractive business environment to FDI and enterprises, Hungary became more innovation-driven while Congo is heading towards the efficiency-driven stage from the factor-driven stage of development.

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