Profitability and Efficiency of Forest Contractors in Slovakia—Comparison of Mountain and Lowland Regions

Abstract

The paper deals with analysis of the forest business sector in Slovakia and the evaluation of profitability and efficiency of forest contractors, with special focus on mountain and lowland regions. Evaluation of profitability was done by using selected indicators of financial analyses for a period of five years. Data envelopment analyses (DEA) was used as non-parametric approach for the assessment of efficiency. The sample size was 153 forest contractors. Data for 2012–2016 were processed. Results of the evaluation show that the profitability of Slovak forest contractors in the mountain regions is higher than the profitability of forest contractors in lowland regions. The results of the efficiency analysis were different due to the nature of the method; where relative efficiency was evaluated, the efficiency of single contractors was compared with the most efficient contractors from the lowland regions. Most of the evaluated units were, according to results of the efficiency analysis scale, ineffective, which implies that it may be beneficial for most contractors to reduce their turnover and thereby increase their relative efficiency. The results of the financial analysis also suggests that contractors have obsolete technical and technological equipment.

Economic Efficiency of Forest Enterprises—Empirical Study Based on Data Envelopment Analysis

“…Kolev [44] also developed performance measurement, using an investments assessment of forestry units. Kovalčík [45] estimated the performance of Slovak forest contractors, using DEA for the assessment efficiency and profitability of Limited Liability Companies in the forestry service sector in Slovakia.…”

Applications of DEA and SFA in benchmarking studies in forestry: state-of-the-art and future directions

“…Six studies applied Malmquist indices to evaluate the changes in productivity over time (Kao 2000;Sowlati and Vahid 2006;Salehirad and Sowlati 2007;Lin and Ge 2019;Obi and Visser 2020). To reduce the risk of using extreme values from a particular year some studies use data from several years to estimate average values (Kovalčík 2018(Kovalčík , 2020.…”

“…The same can be seen in the sawmill studies, where each sawmill is considered a DMU (Yin 1998). Another common approach is to pool data for the same districts or units over a number of years, so the number of DMUs increases (Diaz-Balteiro et al 2006;Kovalčík 2020;Gutiérrez and Lozano 2020). Bogetoft et al (2003) and LeBel (1996) pooled data over 3 and 6 years, respectively, so that a contractor's annual performance represented a DMU.…”

“…Only a few examples of the reviewed studies involve authors with affiliations from the private sector parties, e.g., consultancies Adams 2008, 2009) or the bank sector (Zhang et al 2018). Reviewing the 56 studies only revealed that Obi and Visser (2017a, 2017b, 2018, 2020, Shahi and Dia (2019), Aalmo and Baardsen (2015), and Gutiérrez and Lozano (2020) discuss how their studies could provide some useful decision support to forest companies, forest industries policymakers, and general industry stakeholders involved in the measurement and overall improvement of performance. This may indicate that DEA and SFA studies are mainly prepared by specialists with high technological skills.…”

Assessing the Technical Efficiency of Timber Production during the Transition from a Production-Oriented Management Model to a Multifunctional One: A Case from Poland 1990–2019

“…Kovalčík [25] evaluated the efficiency of forestry in European countries using DEA models adopting labor and timber sale orientations. The same author [26] employed DEA for the efficiency evaluation of forest contractors in mountain and lowland areas. The operational efficiency of timber harvesting contractors in New Zealand was analyzed by Obi and Visser [27] using a DEA model.…”