Central European Business Review 2018, 7(1):37-45 | DOI: 10.18267/j.cebr.194

Investment Subsidies in the Meat Industry and Their Impact on Business Economics

Zdeňka Náglová
Researcher, Institute of agricultural economics and information, Section Research, Department of Economics of Agriculture and Food Industry, Prague, Czech Republic, naglova.zdenka@uzei.cz

This article deals with meat industry subsidies in the Czech Republic. Food processing businesses are entitled to draw funds from the Rural Development Program 2007-2013 (RDP), Axis I, Measure I. 1. 3 Adding value to agricultural and food products. The aim of this paper is to assess whether there were any changes in performance indicators in subsidized meat businesses and to identify their effects on the meat industry. Competitiveness of meat industry is low. Subsidies are among other factors that can help to reach for better competitiveness of this branch. The fixed effect model was used in order to carry out the analysis. According to the results, subsidized meat enterprises did not display any increase in business performance (no increase in labour productivity, value added growth in the supported firm were found) and cannot be considered as a key factor of competitiveness. There was a positive impact on the number of employees and the value of fixed assets in the year the subsidies were drawn. However, the effective use of workers and property did not reflect other performance indicators in the year of drawing.

Keywords: rural development program; subsidy; meat industry; business economy; fixed effect model
JEL classification: B23, L66, M21

Received: December 5, 2017; Revised: February 12, 2018; Published: March 31, 2018  Show citation

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Náglová, Z. (2018). Investment Subsidies in the Meat Industry and Their Impact on Business Economics. Central European Business Review, 7(1), 37-45. doi: 10.18267/j.cebr.194
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