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Determinants of Food Industry Performance: Survey Data and Regressions for Denmark

  • W. H. Furtan
  • J. Sauer

This paper investigates empirically the determinants of firms' performance in the agri-food sector by using recent survey data for Denmark. Treating sales per employee as a proxy for value added, we estimate several bootstrapped regression models to draw conclusions on the marginal effects of potential performance determinants such as the form and nature of ownership, stage of the food chain and commodity sector, new product development, staff quality, firms' competitive stance, and elements of firms' strategy. To draw robust inferences we apply, besides the ordinary heteroscedasticity-corrected Tobit maximum likelihood estimator, a non-parametric least absolute deviations estimator (LAD/CLAD) based on a quantile regression procedure. The results indicate that we cannot reject the hypothesis of no influence of dominant orientation on value added. Rather, firms' focus on human capital, stage and commodity sector better explains their value addition. We reject the hypothesis that regional networks have no influence on value added. Location in �rhus, emphasis on human capital and the negative influence of outsourcing on value added all provide supporting evidence. We reject the hypothesis of no influence of foreign direct investment (FDI), and moreover propose that FDI has targeted the Danish domestic market as a source of value added. Copyright (c) 2008 The Authors. Journal compilation (c) 2008 The Agricultural Economics Society.

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Article provided by Wiley Blackwell in its journal Journal of Agricultural Economics.

Volume (Year): 59 (2008)
Issue (Month): 3 (09)
Pages: 555-573

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Handle: RePEc:bla:jageco:v:59:y:2008:i:3:p:555-573
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  1. Paul Romer, 1989. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc.
  2. Derek Bosworth & Joanne Loundes, 2002. "The Dynamic Performance of Australian Enterprises," Melbourne Institute Working Paper Series wp2002n03, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
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  5. Christy, Ralph D. & Connor, John M., 1989. "Economic Forces Influencing Value-Added Food Industries: Implications For Southern Agriculture," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 21(01), July.
  6. Chellaraj, Gnanaraj & Maskus, Keith E. & Mattoo, Aaditya, 2005. "The contribution of skilled immigration and international graduate students to U.S. innovation," Policy Research Working Paper Series 3588, The World Bank.
  7. Asheim, Bjorn T. & Coenen, Lars, 2005. "Knowledge bases and regional innovation systems: Comparing Nordic clusters," Research Policy, Elsevier, vol. 34(8), pages 1173-1190, October.
  8. Ann E. Harrison & Brian J. Aitken, 1999. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," American Economic Review, American Economic Association, vol. 89(3), pages 605-618, June.
  9. Peter Walkenhorst;, 2001. "Determinants of foreign direct investment in the food industry: The case of Poland," Agribusiness, John Wiley & Sons, Ltd., vol. 17(3), pages 383-395.
  10. Derek Baker & Kenneth Baltzer & Anja Skadk�r M�ller, 2006. "Branding behavior in the Danish food industry," Agribusiness, John Wiley & Sons, Ltd., vol. 22(1), pages 31-49.
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