Economic Impact of Integration in the Food Supply Chain

Abstract

Due to the nature of the food supply chain an important aspect in the context of increasing the efficiency of agri-food companies may be an increase of the integration's degree in the chain. Therefore, exploring the relationships among these variables was found as an important research area and adopted as the goal of the paper. The paper is focused mainly on the theoretical background showing relationship between integration and performance. A description of the theoretical and methodological aspects of performance measurement and its extension (including the integration aspect) was also made in the paper.
For an empirical illustration of the analyzed relationships two steps will be made. Firstly, the integration's degree in the food chain was measured. Secondly, the efficiency of the companies from the cereals processing industry in Europe was assessed. The SFA models (e.g. trans-logarithmic and Cobb-Douglas functional form) were used for assessment of efficiency. By using stochastic method (e.g. the SFA), one may show the influence of external variable (the integration in the supply chain) on the economic performance of enterprises.