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Sources of Economical Growth in the Czech Food Processing

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  • Lukáš Čechura
  • Heinrich Hockmann

Abstract

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 fitted 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.

Suggested Citation

  • Lukáš Čechura & Heinrich Hockmann, 2010. "Sources of Economical Growth in the Czech Food Processing," Prague Economic Papers, Prague University of Economics and Business, vol. 2010(2), pages 169-182.
    • Handle: RePEc:prg:jnlpep:v:2010:y:2010:i:2:id:370:p:169-182
    DOI: 10.18267/j.pep.370
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    Cited by:

    1. Cechura, Lukas & Hockmann, Heinrich & Mala, Zdenka & Maly, Michal, 2014. "Productivity And Efficiency Differences Between Czech And Slovak Milk Producers," Review of Agricultural and Applied Economics (RAAE), Faculty of Economics and Management, Slovak Agricultural University in Nitra, vol. 17(2), pages 1-5, October.
    2. Cechura, Lukas & Grau, Aaron & Hockmann, Heinrich & Levkovych, Inna & Kroupova, Zdenka, 2014. "Catching up or falling behind in Eastern European agriculture – the case of milk production," 142nd Seminar, May 29-30, 2014, Budapest, Hungary 168927, European Association of Agricultural Economists.
    3. Tamara RUDINSKAYA, 2017. "Heterogeneity and efficiency of food processing companies in the Czech Republic," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 63(9), pages 411-420.
    4. Rudinskaya, T. & Náglová, Z., 2018. "Impact of Subsidies on Technical Efficiency of Meat Processing Companies," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 10(1).
    5. Peter Bielik & Martina Hanova & Renata Benda-Prokeinova, 2021. "How to be sustainable in beef consumption - Exploring the factors. Case study," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 67(9), pages 382-390.
    6. Lukas CECHURA & Zdenka KROUPOVA & Tamara RUDINSKAYA, 2015. "Factors determining TFP changes in Czech agriculture," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 61(12), pages 543-551.
    7. Špička, Jindřich, 2015. "The Efficiency Improvement of Central European Corporate Milk Processors in 2008 - 2013," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 7(4), pages 1-14, December.
    8. Cechura, Lukas & Hockmann, Heinrich, 2014. "Heterogeneity in Technology and Efficiency – Specifics of the Food Processing Industry in the Visegrád Countries," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182662, European Association of Agricultural Economists.
    9. Lukáš Čechura, 2012. "Technical efficiency and total factor productivity in Czech agriculture," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 58(4), pages 147-156.
    10. Lukáš Čechura & Heinrich Hockmann, 2017. "Heterogeneity in Production Structures and Efficiency: An Analysis of the Czech Food Processing Industry," Pacific Economic Review, Wiley Blackwell, vol. 22(4), pages 702-719, October.
    11. Tomáš Volek & Martina Novotná, 2015. "Gross Value Added and Total Factor Productivity In Czech Sectors," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 9(1), March.
    12. Cechura, Lukas, 2012. "Technological change in the Czech food processing industry: What did we experience in the last decade?," 131st Seminar, September 18-19, 2012, Prague, Czech Republic 135782, European Association of Agricultural Economists.
    13. Zdeňka Náglová & Marie Šimpachová Pechrová, 2019. "Subsidies and technical efficiency of Czech food processing industry," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 65(4), pages 151-159.

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    More about this item

    Keywords

    transition; Czech Republic; efficiency; food processing; TFP (Total Factor Productivity); SFA (Stochastic Frontier Analysis);
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects

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