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FOREIGN OPERATING CAPITAL AND FOREIGN INDEBTEDNESS. AN ATTEMPT TO EXAMINE MACROECONOMIC CAPITAL STRUCTURE FROM A NEW ANGLE (Kulfoldi mukodotoke es kulso eladosodas. Kiserlet a makrogazdasagi tokestruktura uj szempontu vizsgalatara)

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Belyacz I., Kuti M.

Kozgazdasagi Szemle (Economic Review)

2009

vol. 56

issue 2

133-154

The article sets out to examine macroeconomic capital structure from a corporate point of view based on capital-structure theories and analytical frames for corporate financing. Trade-off theory on a macro level can be seen in terms of the levelling effect of the consumption of foreign debt and the risk of bankruptcy; pecking-order theory can be applied to the order in which global resource flows are tapped; the theory of free cash flow stresses the disciplinary force of debt. The macro-level significance of all these has been pointed up by the credit crisis and the IMF package. Macroeconomic figures prove convincingly that the growth in the aggregate foreign capital employed per unit of GDP has been accelerating in the last decade and the resulting indebtedness precludes important conditions for sustainable economic growth/operation. The authors seek to confirm that this leads to an unbridgeable efficiency gap in utilization of the foreign resources employed. Although Hungary's economic policy-makers remain convinced that the mounting external debt can still be handled, it would be a mistake to ignore the anomalies of macroeconomic operation by which the efficiency gap is being widened.

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1 Kozgazdasagi Szemle (Economic Review)

1 2009

1 Belyacz I.

1 Kuti M.

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FOREIGN OPERATING CAPITAL AND FOREIGN INDEBTEDNESS. AN ATTEMPT TO EXAMINE MACROECONOMIC CAPITAL STRUCTURE FROM A NEW ANGLE (Kulfoldi mukodotoke es kulso eladosodas. Kiserlet a makrogazdasagi tokestruktura uj szempontu vizsgalatara)