Determinants of Food Industry Performance – Empirical Evidence Based on a Survey

William Hartley Furtan and Johannes Sauer

No 6422, 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: This paper empirically investigates the determinants of firms’ performance in the agri-food sector by using recent survey data for Denmark. Treating sales per employee as a proxy for value addition we estimate several bootstrapped regression models to draw conclusions on the marginal effects of potential performance determinants such as the form and nature of ownership, stage of the food chain and commodity sector, new product development, staff quality, firms’ competitive stance, and elements of firms’ strategy. To draw robust inferences we apply, besides the ordinary heteroscedasticity corrected Tobit ML-estimator, a nonparametric least absolute deviations estimator (LAD/CLAD) based on a quantile regression procedure. The results indicate that we cannot reject the hypothesis of no influence of dominant orientation on value added. Rather, firms’ focus on human capital, stage and commodity sector better explains their value addition. We can reject the hypothesis that regional networks have no influence on value added. Differences in location, emphasis on human capital and the negative influence of outsourcing on value added all provide supporting evidence. We reject the hypothesis of no influence of FDI, and moreover propose that FDI has targeted the domestic Danish market as a source of value added.

Keywords: Agribusiness (search for similar items in EconPapers)
Pages: 28
Date: 2008
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea08:6422

DOI: 10.22004/ag.econ.6422

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