Prague Economic Papers 2010, 19(2):169-182 | DOI: 10.18267/j.pep.370

Sources of Economical Growth in the Czech Food Processing

Lukáš Čechura1, Heinrich Hockmann2
1 Department of Agricultural Economics, Czech University of Live Sciences, Kamýcká 129, CZ - 165 21, Praha 6 - Suchdol (cechura@pef.czu.cz).
2 Leibniz-Institute of Agricultural Development in Central and Eastern Europe (IAMO), TheodorLieser-Straße 2, 06120 Halle (Saale), Germany (hockmann@iamo.de).

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.

Keywords: transition, Czech Republic, efficiency, food processing, TFP (Total Factor Productivity), SFA (Stochastic Frontier Analysis)
JEL classification: D24, O12, P27

Published: January 1, 2010  Show citation

ACS AIP APA ASA Harvard Chicago IEEE ISO690 MLA NLM Turabian Vancouver
Čechura, L., & Hockmann, H. (2010). Sources of Economical Growth in the Czech Food Processing. Prague Economic Papers, 19(2), 169-182. doi: 10.18267/j.pep.370
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. Bakucs, L. Z., Latruffe, L., Fertő, I., Fogarasi, J. (2006), "Technical Efficiency of Hungarian Farms before and after Accession." Paper prepared for presentation at Transition in Agriculture - Agricultural Economics in Transition III conference Budapest, 2006 November, pp. 10-11.
    2. Bayarsaihan, T., Coelli, T. J. (2003), "Productivity Growth in pre-1990 Mongolian Agriculture: Spiralling Disaster or Emerging Success?" Agricultural Economics 28: pp. 121-137. Go to original source...
    3. Caves, D. W., Christensen, L. R., Diewert, W. E. (1982), "Multilateral Comparisons of Output, Input and Productivity using Superlative Index Numbers." Economic Journal 92: pp. 73-86. Go to original source...
    4. Curtiss, J. (2002), "Efficiency and Structural Changes in Transition - a Stochastic Frontier Analysis of Czech Crop Production." Institutional Change in Agriculture and Natural Resources (12). Aachen.
    5. Diewert, W. E. (1976), "Exact and Superlative Index Number." Journal of Econometrics 4: pp. 115-145. Go to original source...
    6. Greene, W. (2002), "Fixed and Random Effects in Stochastic Frontier Models." Working Papers 02-16, New York University, Leonard N. Stern School of Business, Department of Economics.
    7. Hockmann, H., Pieniadz, A., Goraj, L. (2007), "Modelling Heterogeneity in Production Models: Empirical Evidence from Individual Farming in Poland." Economics of Polish Agriculture, Selected Papers. 2/2007, pp. 55-71.
    8. Jansik, C. (2002), "Determinants and Influence of Foreign Direct Investments in the Hungarian Food Industry in a Central and Eastern European Context: An Application of the FDI-Concentration Map Method." MTT Taloustutkimus. Julkaisuja.
    9. Key, N., McBride, W., Mosheim, R. (2008), "Decomposition of Total Factor Productivity Change in the U.S. Hog Industry." Journal of Agricultural and Applied Economics 40: pp. 137-149. Go to original source...
    10. Kumbhakar, S., Hjalmarsson, L. (1993), "Technical Efficiency and Technical Progress in Swedish Dairy Farms." In H. Fried, K. Lovell, Schmidt, S., eds., The Measurement of Productive Efficiency: Techniques and Applications. New York.
    11. Munroe, D. (2001), "Economic Efficiency in Polish Peasant Farming: An International Perspective." Regional Studies, Vol. 35(5), pp. 461- 471. Go to original source...
    12. Wandel, J., Hartmann, M. (1999), "Food Processing and Distribution in Transition Economies: Problems and Perspectives." Studies on the Agricultural and Food Sector in Central and Eastern Europe, Vol. 3, Halle (Saale).

    This is an open access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY NC ND 4.0), which permits non-comercial use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content