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Determinants of Food Industry Performance – Empirical Evidence Based on a Survey

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  • Furtan, William Hartley
  • Sauer, Johannes

Abstract

This paper empirically investigates 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 addition 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 ML-estimator, a nonparametric 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 can reject the hypothesis that regional networks have no influence on value added. Differences in location, 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 FDI, and moreover propose that FDI has targeted the domestic Danish market as a source of value added.

Suggested Citation

  • Furtan, William Hartley & Sauer, Johannes, 2008. "Determinants of Food Industry Performance – Empirical Evidence Based on a Survey," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6422, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea08:6422
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    File URL: http://ageconsearch.umn.edu/record/6422/files/454424.pdf
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    References listed on IDEAS

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    1. Breschi, Stefano & Lissoni, Francesco, 2001. "Knowledge Spillovers and Local Innovation Systems: A Critical Survey," Industrial and Corporate Change, Oxford University Press, vol. 10(4), pages 975-1005, December.
    2. Christy, Ralph D. & Connor, John M., 1989. "Economic Forces Influencing Value-Added Food Industries: Implications for Southern Agriculture," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 21(01), pages 13-22, July.
    3. 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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    6. 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.
    7. Sonobe, Tetsushi & Hu, Dinghuan & Otsuka, Keijiro, 2004. "From inferior to superior products: an inquiry into the Wenzhou model of industrial development in China," Journal of Comparative Economics, Elsevier, vol. 32(3), pages 542-563, September.
    8. Eckhardt Bode, 2004. "The spatial pattern of localized R&D spillovers: an empirical investigation for Germany," Journal of Economic Geography, Oxford University Press, vol. 4(1), pages 43-64, January.
    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.
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    Cited by:

    1. López-Mosquera, Natalia & Álvarez-Coque, José María García & Sánchez, Mercedes, 2014. "Does Market Orientation in Small-Scale farms pay off? A study of Innovation behaviour in Spanish agriculture," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182813, European Association of Agricultural Economists.
    2. repec:bla:jageco:v:68:y:2017:i:2:p:427-450 is not listed on IDEAS
    3. Sauer, Johannes & Latacz-Lohmann, Uwe, 2012. "Efficient Innovation in Dairy Production - Empirical Findings for Germany," 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 137386, German Association of Agricultural Economists (GEWISOLA).
    4. Geldes, Cristian & Felzensztein, Christian & Turkina, Ekaterina & Durand, Aurélia, 2015. "How does proximity affect interfirm marketing cooperation? A study of an agribusiness cluster," Journal of Business Research, Elsevier, vol. 68(2), pages 263-272.
    5. Sauer, J. & Latacz-Lohmann, Uwe, 2013. "Efficient Innovation in Dairy Production - Empirical Findings for Germany," 87th Annual Conference, April 8-10, 2013, Warwick University, Coventry, UK 158865, Agricultural Economics Society.
    6. Silverio Alarcón & Mercedes Sánchez, 2013. "External and Internal R&D, Capital Investment and Business Performance in the Spanish Agri-Food Industry," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(3), pages 654-675, September.

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    Agribusiness;

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