Food Companies’ Productivity Dynamics: Exploring the Role of Intangible Assets

Nakatani, Ryota (2023): Food Companies’ Productivity Dynamics: Exploring the Role of Intangible Assets. Forthcoming in: Agribusiness

Abstract

Food insecurity has risen amid economic recovery from the COVID-19 pandemic. Food companies’ productivity dynamics can be driven by intangible assets, financing, economies of scale, lifecycle, and technological convergence. We confront this by studying productivity drivers for detailed food manufacturing industries using cross-country firm-level panel data. The results show that intangible assets nonlinearly and heterogeneously affect productivity growth, and countries with fewer product market regulations demonstrate higher productivity benefits from asset intangibility. Intangible assets do not play a major role for start-up companies, while technological convergence drives productivity growth as they learn new technology in the food markets. Regarding the industrial differences, the bakery sector benefits the most from asset intangibility because of its brand images. Financing is particularly important for the meat/fish and dairy sectors, where capital equipment is necessary, and leverage effects are larger for countries with more access to financial institutions. Economies of scale are a vital productivity enhancer in the grain and starch sector for lowering fixed costs. Industrial policies to (i) raise the quality of intangible assets, (ii) promote financial access, and (iii) utilize scale economies are critical for improving the productivity of food manufacturers.

• Item Type: MPRA Paper
• Language: English
• Keywords: productivity growth; food manufacturing; asset intangibility; start-up; technological convergence; financing; scale economies; agri-food; product market regulations: financial development; grain and starch sector; meat and fish sector; dairy sector; fruit and vegetable sector; bakery sector
• Subjects: D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity; G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill; L - Industrial Organization > L6 - Industry Studies: Manufacturing > L66 - Food ; Beverages ; Cosmetics ; Tobacco ; Wine and Spirits; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O34 - Intellectual Property and Intellectual Capital

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