LABOR-MARKET CHARACTERISTICS AND PROFITABILITY - AN ECONOMETRIC-ANALYSIS OF HUNGARIAN EXPORTING FIRMS, 1986-95

This paper follows through an aspect of microeconomic restructuring in Hungary during the transition period. This restructuring brought abou t substantial changes in the behaviour of all economic agents. Our stu dy combines labour market and corporate financial information to explo re the effect of the quality of labour employed on the profitability o f the firm. The quality of labour is measured as that portion of wage differentials that cannot be explained by a standard human capital mod el. The profitability of Hungarian exporting firms can be explained by economic factors during transition. In addition the quality of labour , export share, wage and bank costs, payables, receivables, foreign ow nership, inventories, amortization and equity are all significant expl anatory variables.