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Investment Subsidies in the Meat Industry and Their Impact on Business Economics

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  • Zdeňka Náglová

Abstract

This article deals with meat industry subsidies in the Czech Republic. Food processing businesses are entitled to draw funds from the Rural Development Program 2007-2013 (RDP), Axis I, Measure I. 1. 3 Adding value to agricultural and food products. The aim of this paper is to assess whether there were any changes in performance indicators in subsidized meat businesses and to identify their effects on the meat industry. Competitiveness of meat industry is low. Subsidies are among other factors that can help to reach for better competitiveness of this branch. The fixed effect model was used in order to carry out the analysis. According to the results, subsidized meat enterprises did not display any increase in business performance (no increase in labour productivity, value added growth in the supported firm were found) and cannot be considered as a key factor of competitiveness. There was a positive impact on the number of employees and the value of fixed assets in the year the subsidies were drawn. However, the effective use of workers and property did not reflect other performance indicators in the year of drawing.

Suggested Citation

  • Zdeňka Náglová, 2018. "Investment Subsidies in the Meat Industry and Their Impact on Business Economics," Central European Business Review, Prague University of Economics and Business, vol. 2018(1), pages 37-45.
    • Handle: RePEc:prg:jnlcbr:v:2018:y:2018:i:1:id:194:p:37-45
    DOI: 10.18267/j.cebr.194
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    More about this item

    Keywords

    rural development program; subsidy; meat industry; business economy; fixed effect model;
    All these keywords.

    JEL classification:

    • B23 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Econometrics; Quantitative and Mathematical Studies
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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