Economics at your fingertips  

The role of technical efficiency in takeovers: Evidence from the French cheese industry, 1985-2000

Jad Chaaban (), Vincent Réquillart () and Audrey Trévisiol
Additional contact information
Audrey Trévisiol: University of Toulouse (INRA), Unité ESR, BP 52627, 31 326 Castanet Tolosan Cedex, France, Postal: University of Toulouse (INRA), Unité ESR, BP 52627, 31 326 Castanet Tolosan Cedex, France

Agribusiness, 2005, vol. 21, issue 4, 545-564

Abstract: The paper aims to identify whether production characteristics, such as technical efficiency and returns to scale, affect takeovers. Applying a two-stage procedure on original panel data on French cheese manufacturers, the paper first estimates firm-specific productive efficiency and scale economies using data envelopment analysis. The paper then uses the findings of the first stage to evaluate a random effects logit model of the determinants of takeover in the French cheese industry for the period 1985-2000. The paper finds that technical efficiency is not a significant determinant of takeovers, whereas the nature of scale economies is. Firms with decreasing returns to scale (i.e., an oversized production capacity) face a higher risk of takeover. This suggests that cheese manufacturers have been seeking to expand their milk processing capacities by acquiring large firms. This proves to be an indirect consequence of the non-transferable milk quota regime affecting the scarce milk input commodity. [EconLit citations: D24, L25, Q13]. © 2005 Wiley Periodicals, Inc. Agribusiness 21: 545-564, 2005.

Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link) Link to full text; subscription required (text/html)

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:

DOI: 10.1002/agr.20064

Access Statistics for this article

Agribusiness is currently edited by Ronald W. Cotterill

More articles in Agribusiness from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().

Page updated 2020-11-13
Handle: RePEc:wly:agribz:v:21:y:2005:i:4:p:545-564