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Determinants Of Food Industry Performance – Survey Data And Regressions For Denmark

  • Furtan, William Hartley
  • Sauer, Johannes

This paper investigates empirically the determinants of firms’ performance in the agrifood 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 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 reject the hypothesis that regional networks have no influence on value added. Location in Århus, 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.

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File URL: http://purl.umn.edu/36851
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Paper provided by Agricultural Economics Society in its series 82nd Annual Conference, March 31 - April 2, 2008, Royal Agricultural College, Cirencester, UK with number 36851.

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Date of creation: 30 Mar 2008
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Handle: RePEc:ags:aes008:36851
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  1. 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.
  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.
  3. W. Bruce Traill & Matthew Meulenberg, 2001. "Innovation in the food industry," Agribusiness, John Wiley & Sons, Ltd., vol. 18(1), pages 1-21.
  4. 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.
  5. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October.
  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. 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.
  8. 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.
  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. 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.
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