Effects of the investment support in the Czech meat processing industry

Abstract

The goal of the paper is to quantify and evaluate the effects of investment subsidies in the Czech meat processing industry. The investment subsidies should enhance the economic results of the supported companies and increase their competitiveness. The analysis is based on the fixed-effect modelling of balanced panel data of 130 meat processors in the period 2008–2013. It quantifies the impact of investment subsidies from the Rural Development Programme (RDP) and the national support programme (Decree of MoA) on profitability, labour productivity, credit debt ratio and the efficiency of production consumption. The conclusions can be generalized for medium-sized and large companies. The results show that investment subsidies from the RDP had not such a significant effect as expected. Investment subsidies from the RDP affected only the labour productivity of large meat processors and the ROA of non-family companies. However, they should preferably help small and medium-sized companies to be more competitive. Subsidies from the national programme increased the profitability of family-owned and medium-sized companies and changed the capital structure of the supported companies which used more bank loans for upgrading the technology.

Enhancing competitiveness in the Indonesian meat processing industry: a literature review

“…Strategy development for Indonesia's meat processing industry should adopt targeted investment supports similar to the Czech meat processing industry [10] to improve profitability and productivity. Embracing digitalization [14; 23] and innovation [15] are crucial for enhancing operational efficiency and meeting modern consumer demands.…”

Understanding the decision‐making in small‐scale beef cattle herd management through a mathematical programming model

“…The direct connection between subsidies and profitability is a topic of much research. Spicka et al (2017) investigated the impact of investment subsidies on the meat industry. Despite such subsidies leading to increased investment activities, they also increase the use of bank loans.…”

Success or Waste of Taxpayer Money? Impact Assessment of Rural Development Programs in Hungary

“…Some academics use firm level data for impact evaluation. Thus, [16] quantified the impact of Rural Development subsidies upon the productivity, profitability and efficiency of Czech meat processing industry, [17,18] analyzed the effect of innovation subsidies in Sweden and East German territories, respectively, [19] analyzed a unique firm level dataset of 2 million projects funded by structural and cohesion funds over the 2007-2013 period for EU 25 countries, and [20] employed meta-regression to analyze the results of 17 papers providing 323 estimates on the impact of Structural Funds upon growth.…”