Technical efficiency of food and drink industry and its determinants
Zdeňka Náglová, Marie Šimpachová Pechrová
The study aims to evaluate the technical efficiency of food and drink companies in the Czech Republic and to find its determinants. The analysis is based on the data of 597 firms and uses the stochastic frontier method. The article identified the key players on the market and less effective groups of processors. The foreign-owned companies have a strong position because of better economy, but the results showed that their efficiency is comparable to the Czech-owned companies. It was confirmed that the size of the company influences its technical efficiency. The lowest efficiency was observed in small companies. Technical efficiency differed also between branches of the food industry. The highest efficiency was in the bakery and milk industry, the lowest efficiency in the fruit and vegetable processing. The subsidized firms reached a significantly higher efficiency. With respect to economic results, there is still a need to improve competitiveness through investments.
business; competitiveness; food processing; stochastic frontier analysis; subsidies; technical efficiency