Local heroes in Hungary

Abstract

There is an intensive debate in literature pertaining to the analysis of successful companies. The present chapter applies the definition of Local Heroes by Schuh to the Hungarian context. The Hungarian Corporate Tax Database was used to analyse the whole population of Hungarian companies in the period 2009-2013. The database consists of 385,723 companies in 2009 and 425,739 companies in 2013. Local Heroes were selected out of them (183-240 companies met the criteria) and analysed according to their business performance level with emphasis on export and value added. Hungarian Local Heroes are a very well-defined group of companies consisting of around 200 companies. Although the number of companies is just slightly increasing, their revenue and added value are increasing to a significant extent (with 32% CAGR and 24% CAGR from 2009 to 2013, respectively). Hungarian Local Heroes are locally-owned, medium-sized or large, very successful, but very underleveraged, mostly manufacturing companies with around 64% Export Intensity. The business performance of Hungarian Local Heroes is mostly based on their own company characteristics (resources and capabilities) and not on industry factors. Those companies that employ more employees are creating even more added value per employee. Hungarian LHs are very profitable companies with around 20% return on equity on average.