The financial efficiency of small food and drink producers across selected European Union countries using data envelopment analysis

Margareta Gardijan Kedžo and Zrinka Lukač

European Journal of Operational Research, 2021, vol. 291, issue 2, 586-600

Abstract: There is an increasing awareness about the importance of the role that small food and beverage producers play in the socio-economic development in many countries. However, since they face many specific problems which create obstacles for their existence, small producers should be identified and supported. To properly analyze their position, one should consider multiple criteria within their operational, financial, marketing and strategic activities. This paper analyzes small food and drink producers from selected countries in the European Union and estimates their financial efficiency using raw financial variables instead of financial ratios. The research is based on the data obtained from the Amadeus database for the period from 2011 to 2015. The relative efficiency is determined by using the data envelopment analysis (DEA). The results show that the number of efficient small companies in the sample had varied throughout the analyzed period. The same holds for the number of efficient companies within countries and within the food and drink industry. Approximately 23% of food producers were relatively efficient, while the share of efficient drink producers increased over time from approximately 20% to 23%. Moreover, we detect countries having the greatest percentage of efficient small producers in the sample. The DEA approach identified efficient producers which have better liquidity, efficiency, leverage and profitability and pointed out cash liquidity as the area of inefficiency for the inefficient companies. This analysis provides policy makers with information for developing policies which could improve the strength of small food and drink producers on a country level.

Keywords: Data envelopment analysis; Productivity and the competitiveness; Manufacturing; Finance (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0377221720301193
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:291:y:2021:i:2:p:586-600

DOI: 10.1016/j.ejor.2020.01.066

Access Statistics for this article

European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati

More articles in European Journal of Operational Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().