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Dynamic versus static inefficiency assessment of the Polish meat‐processing industry in the aftermath of the European Union integration and financial crisis
Author(s) -
Kapelko Magdalena
Publication year - 2017
Publication title -
agribusiness
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.57
H-Index - 43
eISSN - 1520-6297
pISSN - 0742-4477
DOI - 10.1002/agr.21515
Subject(s) - allocative efficiency , inefficiency , economics , european union , data envelopment analysis , scale (ratio) , dynamic efficiency , financial crisis , econometrics , microeconomics , macroeconomics , international economics , mathematics , statistics , physics , quantum mechanics
This paper assesses the dynamic inefficiency of the Polish meat‐processing industry during the period between 2004 and 2012. This study employs also a comparison of dynamic with static inefficiency measures to address the importance of accounting for adjustment costs when measuring a firm's inefficiency. Dynamic and static cost inefficiencies and their decomposition into technical, allocative, and scale inefficiency are derived using Data Envelopment Analysis (DEA). Results show that firms’ low levels of dynamic cost inefficiency are mainly due to dynamic allocative inefficiency rather than technical and scale inefficiency. The 2008 financial crisis appears to hamper firms’ dynamic technical performance, but has also a positive influence on the dynamic allocative and scale inefficiencies. We further show that the average static measures tend to underestimate all inefficiency components compared to dynamic counterparts. [EconLit citations: C61, D61, L66].