Efficiency of Use Fixed Assets in the Context of Profitability – Empirical Evidence of Food Industry Enterprises in Visegrad Group

Martina NovotnáTomáš Volek

DOI 10.7160/aol.2023.150405
No 4/2023, December
pp. 67-77

Novotná, M. and Volek, T. (2023) "Efficiency of Use Fixed Assets in the Context of Profitability – Empirical Evidence of Food Industry Enterprises in Visegrad Group", AGRIS on-line Papers in Economics and Informatics, Vol. 15, No. 4, pp. 67-77. ISSN 1804-1930. DOI 10.7160/aol.2023.150405.

Abstract

Efficient use of production resources in enterprises is necessary for increasing their competitiveness and the potential for their future development. In today's global world, companies are forced to invest in new technologies that are both more energy-efficient and more environmentally friendly, including in the food industry. The paper focusses on the efficiency of production factors in relation to their economic success. The aim is to find possible variants of the development of the links between capital labour ratio and labour productivity in relation to the development of profitability of returns. Empirical analysis coved 2,526 enterprises in food industry in four examined European countries (Visegrad group -V4) - Czech Republic, Hungary, Poland, Slovak Republic. The contribution of the paper is the generalization of the links between the indicators of the efficiency of production factors in the form of recommended inequalities that can be used by enterprises for economically successful development.

Keywords

Food industry, profitability, labour productivity, capital labour ratio.

References

  1. AMADEUS database (n.d.) [Online]. Available: https://www.bvdinfo.com/en-gb/our-products/data/international/amadeus [Accessed: Jan. 23, 2022].
  2. Apostolov, M. (2016) "Cobb–Douglas Production Function on FDI in Southeast Europe", Journal of Economic Structures, Vol. 5, No. 1. ISSN 2193-2409. DOI 10.1186/s40008-016-0043-x.
  3. Berends, P. A. J. and Romme, A. G. L. (2001) "Cyclicality of capital-intensive industries: A system dynamics simulation study of the paper industry", Omega, Vol. 29, No. 6, pp. 543-552. ISSN 0030-2228. DOI 10.1016/S0305-0483(01)00043-3.
  4. Bialowolski, P. and Weziak-Bialowolska, D. (2014) "External factors affecting investment decisions of companies", Economics E-Journal, Vol. 8, No. 1. ISSN 1864-6042.
  5. Bieniasz, A. and Gołaś, Z. (2011) "The influence of working capital management on the food industry enterprises profitability", Contemporary Economics, Vol. 5, No. 4, pp. 68-81. ISSN 2084-0545. DOI 10.5709/ce.1897-9254.29.
  6. Blažková, I. and Dvouletý, O. (2017) "Drivers of ROE and ROA in the Czech Food Processing Industry in the Context of Market Concentration", AGRIS on-line Papers in Economics and Informatics, Vol. 9, No. 3, pp. 3-14. ISSN 1804-1930. DOI 10.7160/aol.2017.090301.
  7. Brennan, M. (2021) "Future productivity". [Online]. Available: https://www.pc.gov.au/news-media/ speeches/future-productivity [Accessed: Jan.23, 2023].
  8. Campbell, M. (2012) "What a Difference a Year Makes: Time Lag Effect of Information Technology Investment on Firm Performance", Journal of Organizational Computing and Electronic Commerce, Vol. 22, No. 3, pp. 237-255. ISSN 1091-9392. DOI 10.1080/10919392.2012.696944.
  9. Coelli, T. D., Prasada Rao, D. S., O’Donnell, C. J. and Battese G. E. (2005) " An Introduction to Efficiency and Productivity Analysis", New York, NY: Springer. ISBN 978-0-387-25895-9.
  10. Doytch, N. and Narayan, S. (2016) "Does FDI Influence Renewable Energy Consumption? An Analysis of Sectoral FDI Impact on Renewable and Non-Renewable Industrial Energy Consumption", Energy Economics, Vol. 54, pp. 291-301. ISSN 0140-9883. DOI 10.1016/j.eneco.2015.12.010.
  11. Firlej, K., Kowalska, A. and Piwowar, A. (2017) "Competitiveness and innovation of the Polish food industry", Agricultural Economics, Vol. 63, No. 11, pp. 502-509. ISSN 1805-9295. DOI 10.17221/111/2016-AGRICECON.
  12. Fried, H. O., Knox Lovell, C. A. and Schmidt, S. S. (2008) " Efficiency and productivity", New York, NY: Oxford University Press. ISBN 978-1-119-96752-1.
  13. Gilje, E. P. and Taillard, J. P. (2016). "Do Private Firms Invest Differently than Public Firms? Taking Cues from the Natural Gas Industry", The Journal of Finance, Vol. 71, No. 4, pp. 1733-1778. E-ISSN 1540-6261. DOI 10.1111/jofi.12417.
  14. Grozdić, V., Marić, B., Radišić, M., Šebestová, J. and Lis, M. (2020) "Capital Investments and Manufacturing Firms’ Performance: Panel-Data Analysis", Sustainability, Vol. 12, No. 4, p. 1689. ISSN 2071-1050. DOI 10.3390/su12041689.
  15. Guest, R. (2011) "Population ageing, capital intensity and labour productivity", P acific Economic Review, Vol. 16, No. 3, pp. 371-388. ISSN 1361-374X. DOI 10.1111/j.1468-0106.2011. 00553.x.
  16. Hirsch, S., Schiefer, J., Gschwandtner, A. and Hartmann, M. (2014) "The determinants of firm profitability differences in EU food processing", Journal of Agricultural Economics, Vol. 65, No. 3, pp. 703-721. ISSN 1477-9552. DOI 10.1111/1477-9552.12061.
  17. Khazaei, M. (2021) "Relationship of profitability of world’s top companies with entrepreneurship, competitiveness, and business environment indicators", Applied Economics, Vol. 53, No. 23, pp. 2584-2597. ISSN 1945-7790. DOI 10.1080/00036846.2020.1859455.
  18. Kowalska, A. S., Gurkowa, K., Soukal, I., Matejicek, M. and Olszaiska, A. (2021) "Assessment of the Competitive Position of the V4 Group Countries in the Foreign Trade of Agri-food Industry Products", In J. Maci, P. Maresova, K. Firlej and I. Soukal (Eds.), Proceedings of the international scientific conference Hradec Economic Days, University Hradec Kralove, Vol. 11, No. 1, pp. 449-460. DOI 10.36689/uhk/hed/2021-01-045.
  19. Li, Z., Liao, G. and Albitar, K. (2020) "Does corporate environmental responsibility engagement affect firm value? The mediating role of corporate innovation", Business Strategy and the Environment, Vol. 29, No.3, pp. 1045-1055. ISSN 0964-4733. DOI 10.1002/bse.2416.
  20. Mura, L. and Hajduova, Z. (2021) "Measuring efficiency by using selected determinants in regional smes", Entrepreneurship and Sustainability Issues, Vol. 8, No. 3, pp. 487-450. E-ISSN 2345-0282. DOI 10.9770/jesi.2021.8.3(31).
  21. Náglová, Z. and Šimpachová Pechrová, M. (2019) "Subsidies and technical efficiency of Czech food processing industry", Agricultural Economics, Vol. 65, No. 4, pp. 151-159. ISSN 1805-9295. DOI 10.17221/234/2018-AGRICECON.
  22. Novotná, M. (2022) "Production efficiency indicators and their relations at macro and micro level the example of the waste sector". [Online]. Available: available athttps://dspace.jcu.cz/bitstream/ handle/123456789/39720/habilita%20n%C3%AD%20pr%C3%A1ce%20_ Martina_Novotna. pdf?sequence=1, [Accessed: Nov. 2, 2022]. (In Czech).
  23. Nylund, P. A., Arimany-Serrat, N., Ferras-Hernandez, X., Viardot, E., Boateng, H. and Brem, A. (2020) "Internal and external financing of innovation Sectoral differences in a longitudinal study of European firms", European Journal of Innovation Management, Vol. 23, No. 2, SI, pp. 200-213. ISSN 1460-1060. DOI 10.1108/EJIM-09-2018-0207.
  24. Redlichová, R., Chmelíková, G., Blažková, I., Svobodová, E. and Vanderpuje, I. N. (2021) "Organic Food Needs More Land and Direct Energy to Be Produced Compared to Food from Conventional Farming: Empirical Evidence from the Czech Republic", Agriculture, Vol. 11, No. 9. ISSN 2077-0472. DOI 10.3390/agriculture11090813.
  25. Rodrigues, R., Samagaio, A. and Felicio, T. (2020) "Corporate governance and R&D investment by European listed companies", Journal Of Business Research, Vol. 115, pp. 289-295. ISSN 0148-2963. DOI 10.1016/j.jbusres.2019.11.070.
  26. Svobodová, E., Redlichová, R., Chmelíková, G. and Blažková, I. (2022) "Are the Agricultural Subsidies Based on the Farm Size Justified? Empirical Evidence from the Czech Republic", Agriculture, Vol. 12, No. 10. ISSN 2077-0472. DOI 10.3390/agriculture12101574.
  27. Smejkal, A., Novotna, M. and Volek, T. (2022) "Company investments in the context of financial strategies", Argumenta Oeconomica, Vol. 48, No. 1, pp. 163-185. E-ISSN 2720-5088, ISSN 1233-5835. DOI 10.15611/aoe.2022.1.07.
  28. Šeligová, M. and Koštuříková, I. (2022) "The Relationship between Working Capital and Profitability of Companies Operating in the Food Industry in the Czech Republic", AGRIS on-line Papers in Economics and Informatics, Vol. 14, No. 3, pp. 97-110. ISSN 1804-1930. DOI 10.7160/aol.2022.140308.
  29. Vavřina, J. and Lacina, L. (2018) "Profitability of foodstuff processing companies in V4 countries during the 2008-2012 economic crisis", Society and Economy,, Vol. 40, No. 2, pp. 245-270. E-ISSN 0308-5147, ISSN 1469-5766. DOI 10.1556/204.2018.40.2.5.
  30. Vukšić, G. (2016) "Effects of private ownership, trade, and foreign direct investment on labor productivity growth in transition economies: Evidence from the Croatian manufacturing industry", Emerging Markets Finance and Trade, Vol. 52, No. 2, pp. 322-335. ISSN 1540-496X. DOI 10.1080/1540496X.2015.1011540.
  31. Vrchota, J., Vlčková, V. and Frantikova, Z. (2020) "Division of enterprises and their management strategies in relation to industry 4.0", Central European Business Review, Vol. 9, No. 4, pp. 27-44. ISSN 1805-4862. DOI 10.18267/j.cebr.243.

Full paper

  Full paper (.pdf, 731.89 KB).