IDEAS home Printed from https://ideas.repec.org/a/caa/jnlage/v67y2021i10id93-2021-agricecon.html
   My bibliography  Save this article

Technical efficiency of the food and drink industry and its determinants

Author

Listed:
  • Zdeňka Náglová

    (Department of Economics of Agriculture and Food Industry, Institute of Agricultural Economics and Information, Prague, Czech Republic)

  • Marie Šimpachová Pechrová

    (Department of Modelling of Agricultural Policy, Institute of Agricultural Economics and Information, Prague, Czech Republic)

Abstract

This study focuses on evaluating the technical efficiency (TE) of food and drink companies in the Czech Republic and on finding its determinants. The analysis is based on the data of 597 firms and uses the stochastic frontier method. We have identified the key players in the market and the less effective groups of processors. Foreign-owned companies have a strong position because of a better economy, but the results showed that their efficiency is comparable with that of Czech-owned companies. The results helped confirm that the size of the company influences its TE. The lowest efficiency was observed in small companies. TE also differed among branches of the food industry. The highest efficiency was in the bakery and milk industries, and the lowest efficiency was in fruit and vegetable processing. Subsidised firms reached a significantly higher efficiency. With respect to economic results, there is still a need to improve competitiveness through investments.

Suggested Citation

  • Zdeňka Náglová & Marie Šimpachová Pechrová, 2021. "Technical efficiency of the food and drink industry and its determinants," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 67(10), pages 409-422.
    • Handle: RePEc:caa:jnlage:v:67:y:2021:i:10:id:93-2021-agricecon
    DOI: 10.17221/93/2021-AGRICECON
    as

    Download full text from publisher

    File URL: http://agricecon.agriculturejournals.cz/doi/10.17221/93/2021-AGRICECON.html
    Download Restriction: free of charge
    File URL: http://agricecon.agriculturejournals.cz/doi/10.17221/93/2021-AGRICECON.pdf
    Download Restriction: free of charge
    File URL: https://libkey.io/10.17221/93/2021-AGRICECON?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Anthony N. Rezitis & Maria A. Kalantzi, 2016. "Investigating Technical Efficiency and Its Determinants by Data Envelopment Analysis: An Application in the Greek Food and Beverages Manufacturing Industry," Agribusiness, John Wiley & Sons, Ltd., vol. 32(2), pages 254-271, April.
    2. Margono, Heru & Sharma, Subhash C., 2006. "Efficiency and productivity analyses of Indonesian manufacturing industries," Journal of Asian Economics, Elsevier, vol. 17(6), pages 979-995, December.
    3. Ivana Blažková & Ondřej Dvouletý & Ondřej Machek, 2020. "What drives total factor productivity and its growth in post-communist countries? The case of the Czech food industry," Journal of Agribusiness in Developing and Emerging Economies, Emerald Group Publishing Limited, vol. 10(3), pages 285-305, April.
    4. Subal Kumbhakar & Gudbrand Lien & J. Hardaker, 2014. "Technical efficiency in competing panel data models: a study of Norwegian grain farming," Journal of Productivity Analysis, Springer, vol. 41(2), pages 321-337, April.
    5. Menrad, K., 2004. "Innovations in the food industry in Germany," Research Policy, Elsevier, vol. 33(6-7), pages 845-878, September.
    6. Tamara RUDINSKAYA, 2017. "Heterogeneity and efficiency of food processing companies in the Czech Republic," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 63(9), pages 411-420.
    7. Willam Greene, 2005. "Fixed and Random Effects in Stochastic Frontier Models," Journal of Productivity Analysis, Springer, vol. 23(1), pages 7-32, January.
    8. Laure Latruffe & Kelvin Balcombe & Sophia Davidova & Katarzyna Zawalinska, 2005. "Technical and scale efficiency of crop and livestock farms in Poland : does specialization matte r?," Post-Print hal-02392195, HAL.
    9. Benfratello, Luigi & Sembenelli, Alessandro, 2006. "Foreign ownership and productivity: Is the direction of causality so obvious?," International Journal of Industrial Organization, Elsevier, vol. 24(4), pages 733-751, July.
    10. Awudu Abdulai & Hendrik Tietje, 2007. "Estimating technical efficiency under unobserved heterogeneity with stochastic frontier models: application to northern German dairy farms," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 34(3), pages 393-416, September.
    11. Ondřej Dvouletý & Ivana Blažková, 2019. "The Impact of Public Grants on Firm-Level Productivity: Findings from the Czech Food Industry," Sustainability, MDPI, vol. 11(2), pages 1-24, January.
    12. Richard Harris & Mary Trainor, 2005. "Capital Subsidies and their Impact on Total Factor Productivity: Firm‐Level Evidence from Northern Ireland," Journal of Regional Science, Wiley Blackwell, vol. 45(1), pages 49-74, February.
    13. Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
    14. Magdalena Kapelko & José Moyano‐fuentes & Manuel Núñez‐nickel, 2019. "Technical Efficiency of Producer Cooperatives versus Private Firms: A Longitudinal Empirical Study," Journal of Small Business Management, Taylor & Francis Journals, vol. 57(3), pages 909-926, July.
    15. Richard Harris & Catherine Robinson, 2003. "Foreign Ownership and Productivity in the United Kingdom Estimates for U.K. Manufacturing Using the ARD," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 22(3), pages 207-223, May.
    16. Dimitris Skuras & Kostas Tsekouras & Efthalia Dimara & Dimitris Tzelepis, 2006. "The Effects of Regional Capital Subsidies on Productivity Growth: A Case Study of the Greek Food and Beverage Manufacturing Industry," Journal of Regional Science, Wiley Blackwell, vol. 46(2), pages 355-381, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ryota Nakatani, 2024. "Food companies' productivity dynamics: Exploring the role of intangible assets," Agribusiness, John Wiley & Sons, Ltd., vol. 40(1), pages 185-226, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rudinskaya, T. & Náglová, Z., 2018. "Impact of Subsidies on Technical Efficiency of Meat Processing Companies," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 10(01).
    2. Boris E. Bravo‐Ureta & Víctor H. Moreira & Javier L. Troncoso & Alan Wall, 2020. "Plot‐level technical efficiency accounting for farm‐level effects: Evidence from Chilean wine grape producers," Agricultural Economics, International Association of Agricultural Economists, vol. 51(6), pages 811-824, November.
    3. Bravo-Ureta, Boris E. & Njuki, Eric & Palacios, Ana Claudia & Salazar, Lina, 2022. "Agricultural Productivity in El Salvador: A Preliminary Analysis," IDB Publications (Working Papers) 11984, Inter-American Development Bank.
    4. Habtamu ALEM, 2018. "Effects of model specification, short-run, and long-run inefficiency: an empirical analysis of stochastic frontier models," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 64(11), pages 508-516.
    5. Raushan Bokusheva & Lukáš Čechura & Subal C. Kumbhakar, 2023. "Estimating persistent and transient technical efficiency and their determinants in the presence of heterogeneity and endogeneity," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(2), pages 450-472, June.
    6. Mark A. Andor & David H. Bernstein & Stephan Sommer, 2021. "Determining the efficiency of residential electricity consumption," Empirical Economics, Springer, vol. 60(6), pages 2897-2923, June.
    7. Albalate, Daniel & Rosell, Jordi, 2019. "On the efficiency of toll motorway companies in Spain," Research in Transportation Economics, Elsevier, vol. 76(C).
    8. Zhang, Lin, 2017. "Correcting the uneven burden sharing of emission reduction across provinces in China," Energy Economics, Elsevier, vol. 64(C), pages 335-345.
    9. Lachaud, Michee Arnold & Bravo-Ureta, Boris E. & Ludena, Carlos E., 2015. "Agricultural productivity growth in Latin America and the Caribbean and other world regions: An analysis of climatic effects, convergence and catch-up," Working Papers 40, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    10. Karanki, Fecri & Lien, Gudbrand, 2024. "Persistent and transient inefficiencies in the U.S. airline industry," Transport Policy, Elsevier, vol. 159(C), pages 254-265.
    11. Rawat, Pankaj S. & Sharma, Seema, 2021. "TFP growth, technical efficiency and catch-up dynamics: Evidence from Indian manufacturing," Economic Modelling, Elsevier, vol. 103(C).
    12. Gale A. Boyd & Jonathan M. Lee, 2020. "Relative Effectiveness of Energy Efficiency Programs versus Market Based Climate Policies in the Chemical Industry," The Energy Journal, , vol. 41(3), pages 39-62, May.
    13. Dorgyles C.M. Kouakou, 2022. "Separating innovation short-run and long-run technical efficiencies: Evidence from the Economic Community of West African States (ECOWAS)," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 19(1), pages 103-141, June.
    14. Dorgyles C.M. Kouakou, 2022. "Separating innovation short-run and long-run technical efficiencies: Evidence from the Economic Community of West African States (ECOWAS)," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 19(1), pages 103-141, June.
    15. Sedat Alataş & Burcu Hiçyılmaz & Etem Karakaya, 2024. "Material demand and material efficiency for sustainable development in the European Union countries: A stochastic frontier analysis," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(1), pages 166-183, February.
    16. Zdeňka Náglová & Marie Šimpachová Pechrová, 2019. "Are Wine Producers With Subsidies More Technically Efficient?," Central European Business Review, Prague University of Economics and Business, vol. 2019(1), pages 1-14.
    17. Zhu, Xueqin & Milán Demeter, Róbert, 2012. "Technical efficiency and productivity differentials of dairy farms in three EU countries: the role of CAP subsidies," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 13(01), pages 1-27.
    18. Gale Boyd & Matt Doolin, 2020. "The Energy Efficiency Gap and Energy Price Responsiveness in Food Processing," Working Papers 20-18, Center for Economic Studies, U.S. Census Bureau.
    19. Subal C. Kumbhakar & Gudbrand Lien, 2017. "Yardstick Regulation of Electricity Distribution Disentangling Short-run and Long-run Inefficiencies," The Energy Journal, International Association for Energy Economics, vol. 0(Number 5).
    20. Romero-Jordán, Desiderio & del Río, Pablo, 2022. "Analysing the drivers of the efficiency of households in electricity consumption," Energy Policy, Elsevier, vol. 164(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:caa:jnlage:v:67:y:2021:i:10:id:93-2021-agricecon. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ivo Andrle (email available below). General contact details of provider: https://www.cazv.cz/en/home/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.