Investments, Technical Change and Efficiency: Empirical Evidence from Czech Food Processing

Tamara RudinskayaElena Kuzmenko

DOI 10.7160/aol.2019.110409
No 4/2019, December
pp. 93-103

Rudinskaya, T. and Kuzmenko, E. (2019) “Investments, Technical Change and Efficiency: Empirical Evidence from Czech Food Processing", AGRIS on-line Papers in Economics and Informatics, Vol. 11, No. 4, pp. 93-103. ISSN 1804-1930. DOI 10.7160/aol.2019.110409.

Abstract

This empirical study aims to shed light on the dynamic linkages among investments, technical efficiency and productivity of food processing at a sectoral level. We use data obtained from meat and milk processing firms operating in the Czech Republic. The data set covers a period from 2011 to 2015. Being based on a production function frontier framework and the Divisia index our study is focuses on the estimation of technical efficiency and productivity of Czech Food processing firms in connection with the received investments. The results of the conducted analysis have shown that investments, directed to a production process of meat and milk processing firms operating in the Czech Republic, do have a positive effect on their technical efficiency. Moreover, it provides an opportunity to increase the capacity of raw milk processing. Higher TFP in food processing industry may result in higher TFP in agriculture.

Keywords

Technical efficiency, Technical change, Investments, Czech food processing, Divisia index.

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