The executive summary of the economic analysis
The Hungarian-Slovak cross-border migration /Slovensko–maďarská pohraničná migrácia
(Project No HUSK 1101/1.2.1/0171) was implemented in the framework of the HungarySlovakia Cross-Border Cooperation Programme 2007–2013. The project started on 1st, July
2014 and finished on 30th, June 2015. The lead partner of the project was Kopint Foundation
for Economic Research and the CB partner was Kempelen Institute. The study here contains
the detailed economic analysis of the Hungarian side of the Slovak-Hungarian border region.
The Hungarian section of the Slovak-Hungarian border region is not a homogenous territory
in terms of its socio-economic characteristics. There are considerable differences both on
county and district levels. In Slovakia and in Hungary the western side of the border region is
more developed than the Eastern section. However, the economic potential seems to be
stronger in the eastern side of Slovakia than in Hungary. FDI plays an important role in the
development of the western border region in both countries. The main drivers of growth are
the automotive industry as well the supplying metal processing sectors.
For demarking the cross-border region the territories at the level of NUTS3 were indicative,
which in Hungary are counties, and districts (kraje) in Slovakia. From Hungary, it is the
counties of Győr-Moson-Sopron, Komárom-Esztergom, and Pest on the North-Western
Hungarian border that with this approach make up the cross-border region, while from the
Slovak side, it is the districts of Nagyszombat and Nyitra in South-Western Slovakia that do.
Along the North-Eastern Hungarian border in the Hungarian side, it is the county of BorsodAbaúj-Zemplén and Nógrád that constitute the cross-border region while on the Slovak side
the local council districts of Kassa and Besztercebánya.
However, taking into account that the concerned counties and districts cover a wider
geographic area that the strictly defined border region, for the purpose of examining the closer
relations of the border area, it seems more appropriate to delineate the regions based on
smaller territorial units. Therefore the research is implemented at the level of LAU1, i.e. units
corresponding to micro-regions, while in the Slovak side at the level of townships. Hence we
defined the border region as 27 sub-regions selected from 6 counties on the Hungarian side,
located directly along the border, out of which 15 belong to the eastern border section, and 12
to the western side of the border1. Similarly, the Slovak study strived to analyse the economic
processes along the border at the level of districts.
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Eastern border section: subregions of Abaúj-Hegyköz, Bodrogköz, Ózd, Encs, Edelény, Kazincbarcika,
Sárospatak, Sátoraljaújhely, Szikszó, Bátonyterenye, Rétság, Szécsény, Salgótarján, Balassagyarmat,
Pétervására
Western border section: subregions of Szob, Szentendre, Vác, Dunakeszi, Tata, Tatabánya, Dorog,
Esztergom, Komárom, Mosonmagyaróvár, Győr, Pannonhalma
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Although the economic consequences of the global crisis of 2008 affected the whole border
region, the processes of recovery were different in the east and in the west. The crisis was
accompanied by a significant economic decline in the west, but the recovery was also fast on
this section. In contrast to that, the counties and micro-regions of the eastern border section
experienced a milder economic downturn, but the recovery is slower as well. Based on
territorial distribution indicators, the east-west polarization, already apparent before the crisis,
is still present.
The current economic analysis attempts to shed light on the characteristics of the border
region and on the reasons behind the unfolding economic processes on several levels and
from several perspectives. The analysis is on the one hand based on county and microregional data made available by the Central Statistical Office’s territorial statistics, on the
other hand on the data of a corporate database, also provided by the CSO. For the analysis of
the economic potential of the border region we used the aggregate data of the TÁSA
(corporate tax returns) database of the Hungarian Central Statistical Office, relating to nonfinancial enterprises. For certain analysis we also used the data of Eurostat. In the course of
the analysis the access to appropriate micro-level data posed a fundamental challenge. The
statistical data on LAU 1 level are accessible for very general indicators only. With regard to
the CSO corporate data, part of the unique small regional data – as a result of the data
protection regulations – was excluded from the investigations, hence conclusions concerning
the border region could be drawn on a higher aggregate level only, restricting analysis.
The macroeconomic processes witnessed between 2008 and 2013 profoundly affected
economic trends on the Hungarian side of the border region. By the end of 2008 – when the
global financial crisis emerged – Hungary’s position was less favourable than that of other
countries in the region; while most new EU Member States from Eastern Europe showed
robust growth between 2006 and 2008, Hungary in 2008 was recovering from stagnation
stemming from fiscal stabilisation in 2006 and 2007. Overall the Hungarian economy’s
performance was consistently and significantly worse between 2009 and 2012 than that of the
other Visegrad countries attributable to contracting domestic demand. Things took a positive
turn in 2013, and these trends continued in 2014. The trends observed on the macro-level also
show a pronounced presence in the counties and sub-regions of the border region, and on the
level of Slovakian districts.
Based on the territorial distribution of companies according to categories of sectors and staff
number, the western border section is much stronger than the eastern. The distribution of
companies is concentrated – the number of enterprises is threefold in the western region, and
the number of population is one and a half times more than in the eastern region. At the same
time the leading economic activities are similar, but their volumes are different.
Data relating to non-financial enterprises operating in the counties of the border region
suggest that the economic potential of the western counties exceeds that of counties in the
eastern region. In 2013, the western counties generated approximately 77 per cent of total
sales revenue in the counties of the border region. They accounted for 77 per cent of export
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sales, 85 per cent of foreign registered capital and 75 per cent of registered capital in the
region. 74 per cent of the employed workforce is located in the region.
Neither the territorial distribution of the economic activities nor that of the incomes is even in
the border region. Although in terms of resident population and income, the border region as a
whole corresponds to the country level, but the values of the income equality indexes reveal
the income differences within the region.
Clustering indicates that the region is not homogeneous on the basis of socio-economic
criteria; the sub-regions of the eastern and western border region are clearly distinct. The
performance of the three small regions of the western region (Győr, Dunakeszi, Szentendre)
in certain socio-economic indicators are so outstanding, that they constitute a separate group
within the developed, western region. The second most developed group is composed of the
remaining sub-regions of the western region, complemented by Balassagyarmat, the most
developed sub-region of the eastern region. The eastern border region according to its
development levels can also be further subdivided: the trailing group is made up of three subregions of the eastern region; the remaining eastern subregions make up the forth group in
terms of developent ranking.
The ranking of the sub-regional groups formed during the clustering is supported by the
development index of the sub-regions. In terms of the development level, the sub-region of
Győr excels in socio-economic, and infrastructure development compared to the other subregions of the border region.
The east-west border region can be further subdivided into smaller territorial units (clusters). a
few dominant sub-regions (sub-regions of Győr, Esztergom, Komárom, Dunakeszi in the
western border region, and the sub-regions of Kazincbarcika, Balassagyarmat, Ózd and
Salgótarján in the eastern border region) determine the overall performance of the whole
border region.
Analysing the characteristics of the corporate structure, we can observe on both sides of the
border region that the performance of a small number (93 in 2013) of large enterprises
influence the processes on the Hungarian border section. Hence, almost 60 per cent of the
corporate registered capital and more than 70 per cent of the FDI is generated by this
corporate group, while 80 per cent of the revenue from export sale stems from large
companies employing a workforce of more than 250. (2013). The role of this group is also
paramount in employment: they employ one-third of the total workforce in the border region.
In the border region, the dominant role of large companies is greater than in the rest of the
country.
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The contents of this executive summary do not necessarily reflect the official position of the
European Union.
Contact of the Hungary-Slovakia Cross-border Co-operation Programme 2007-2013:
http://www.husk-cbc.eu/
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