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Productive efficiency and firm exit in the food sector

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Author Info
Dimara, Efthalia
Skuras, Dimitris
Tsekouras, Kostas
Tzelepis, Dimitris

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Abstract

This work examines the effects of productive efficiency on the survival of firms in the Greek food sector. Technical and scale efficiency scores are computed within a data envelopment analysis (DEA) framework and are used as explanatory variables in a parametric (Weibull) survival model. High technical efficiency increases the median survival time and lowers the hazard rate of exit. As the scale efficiency of a firm operating either at increasing or decreasing returns to scale approaches one (1), its theoretically maximum value, the expected median survival time, is maximized for all types of exits. Developments in biotechnology, the evolution of alternative food supply networks, innovations in the food sector and competition policy are likely to affect technical and scale efficiency of food manufacturing firms. Results unraveling the effects of technical and scale efficiency on the survival of firms in the food sector are of particular relevance to food policy makers.

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File URL: http://www.sciencedirect.com/science/article/B6VCB-4R00FVH-1/1/2633306fc0b1d3c9da24ac21eeffa0c4
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Publisher Info
Article provided by Elsevier in its journal Food Policy.

Volume (Year): 33 (2008)
Issue (Month): 2 (April)
Pages: 185-196
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Handle: RePEc:eee:jfpoli:v:33:y:2008:i:2:p:185-196

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Web page: http://www.elsevier.com/locate/foodpol

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  1. Ho, Dong-huyn & Lööf, Hans, 2009. "Creating Innovations, Productivity and Growth - the efficiency of Icelandic firms," Working Paper Series in Economics and Institutions of Innovation 162, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies. [Downloadable!]
  2. Oh, Dong-Hyun & Lööf, Hans & Heshmati, Almas, 2009. "The Icelandic Economy: a victim of the financial crisis or simply inefficient?," Working Paper Series in Economics and Institutions of Innovation 199, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies. [Downloadable!]
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