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Staff Publications

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    'Staff publications' is the digital repository of Wageningen University & Research

    'Staff publications' contains references to publications authored by Wageningen University staff from 1976 onward.

    Publications authored by the staff of the Research Institutes are available from 1995 onwards.

    Full text documents are added when available. The database is updated daily and currently holds about 240,000 items, of which 72,000 in open access.

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Record number 531350
Title Dynamic technical inefficiency and industrial concentration in the Indonesian food and beverages industry
Author(s) Setiawan, Maman; Oude Lansink, Alfons G.J.M.
Source British Food Journal 120 (2018)1. - ISSN 0007-070X - p. 108 - 119.
DOI http://dx.doi.org/10.1108/BFJ-04-2017-0226
Department(s) Business Economics
WASS
Publication type Refereed Article in a scientific journal
Publication year 2018
Keyword(s) Dynamic technical inefficiency - Indonesian food and beverages industry - Industrial concentration - life hypothesis
Abstract Purpose: The purpose of this paper is to investigate the relation between industrial concentration and technical inefficiency in the Indonesian food and beverages industry using a dynamic performance measure (dynamic technical inefficiency) that accounts for the presence of adjustment costs. Design/methodology/approach: This research uses panel data of 44 subsectors in the Indonesian food and beverages industry for the period 1980-2014. The dynamic input directional distance function is applied to estimate the dynamic technical inefficiency. Further, the Granger causality between industrial concentration and dynamic technical inefficiency is tested using a dynamic panel data model. A bootstrap truncated regression model is finally applied to estimate the relation between industrial concentration and dynamic technical inefficiency based on the results from the Granger causality test. Findings: The results show that the Indonesian food and beverages industry has a high dynamic technical inefficiency. Investigation of the causality of the relation shows that industrial concentration has a positive effect on dynamic technical inefficiency at the subsector level, with no reversed causality. The results suggest that the quiet life hypothesis applies to the Indonesian food and beverages industry. Originality/value: The literature investigating the relation between industrial concentration and performance relies on static measures of performance, such as technical efficiency. Static measures provide an incorrect metric of the firms’ performance in the presence of adjustment costs associated with investment. Therefore, this research has a contribution in measuring dynamic technical inefficiency that accounts for the presence of the adjustment cost as well as its relation with industrial concentration in the Indonesian food and beverages industry.
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