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Sources of Economical Growth in the Czech Food Processing

  • Lukáš Čechura
  • Heinrich Hockmann

The paper attempts to assess the development path of the Czech food processing and to identify the presence of idiosyncratic developments in industries. We elaborate it by using a fi tted production function for the construction of TFP and by decomposing TFP into a scale effect, a technical change effect and an efficiency effect for total food processing and its selected branches. The results suggest that despite more than one decade of transition, serious adjustment problems exist, including problems on the capital market. Furthermore, contrary to the large differences among firms in the whole sample, the various sectors are rather homogeneous. TFP shows that although individual sectors have a few frontrunners, the majority of companies perform quite poorly. The scale effect is relatively small in food processing. Technical change has contributed positively to TFP in recent years, and the efficiency effect varies rather strongly. Whereas scale effect and technical change have a similar pattern across industries, the efficiency effect differs significantly. There is also some indication that the efficiency effect is affected by different sources. Finally, in addition to systemic effects, industry developments are characterized by idiosyncratic factors, especially in the Dairy industry.

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Article provided by University of Economics, Prague in its journal Prague Economic Papers.

Volume (Year): 2010 (2010)
Issue (Month): 2 ()
Pages: 169-182

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Handle: RePEc:prg:jnlpep:v:2010:y:2010:i:2:id:370:p:169-182
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  1. William Greene, 2002. "Fixed and Random Effects in Stochastic Frontier Models," Working Papers 02-16, New York University, Leonard N. Stern School of Business, Department of Economics.
  2. Key, Nigel D. & McBride, William D. & Mosheim, Roberto, 2008. "Decomposition of Total Factor Productivity Change in the U.S. Hog Industry," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 40(01), April.
  3. Darla Munroe, 2001. "Economic Efficiency in Polish Peasant Farming: An International Perspective," Regional Studies, Taylor & Francis Journals, vol. 35(5), pages 461-471.
  4. Hockmann, Heinrich & Pieniadz, Agata & Goraj, Lech, 2007. "Modeling heterogeneity in production models: empirical evidence from individual farming in Poland
    [Modellierung der Heterogenität der Faktorqualitäten in Produktionsfunktionen: Empirische Ergebniss
    ," IAMO Discussion Papers 109, Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO).
  5. Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
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