Economic Crisis and Firms’ Performance: Empirical Evidence for the Greek Cheese Industry

Modaffari

2020

BFJ

PurposeThe aim of this paper is to analyze how “mini-bonds,” an innovative financial tool for Italian small and medium-sized enterprises (SMEs), can contribute to the development and sustainability of the agri-food sector and its local products, such as Pecorino Cheese.Design/methodology/approachThe study was conducted as a qualitative case study applying the CAOS (“characteristics, ambience, organization, start-up”) model. This model makes it possible to describe all variables that affect a company in a given economic context.FindingsIn Sardinia, a small island to the southwest of Italy, there are more than 60,000 agricultural enterprises, 60 percent of which are shepherding operations. Obtaining financial resources is a constant challenge, often related to the uncertainties inherent in seasonal activities. This paper explores how a mini-bond was implemented to promote the development and sustainability of Pecorino Cheese.Research limitations/implicationsLimitations are chiefly related to the short observation period—the bond was first issued in 2018—and to the narrow geographical base of observation.Originality/valueThis research contributes to the expanding body of literature on innovative financial tools for the promotion and development of the local agri-food heritage. It may be useful to practitioners currently researching and developing growth strategies for companies. Existing barriers to credit access are among the most important causes of the lack of development of SMEs, especially in Italy where SMEs represent the principal type of new businesses in the agri-food sector, and their economic success is so dependent on seasonality. In February 2019, the Pecorino case played a role in the Italian government stepping in to avoid the collapse of the price of milk. Future research will focus on the analysis of specific economic results of the financial operations described herein, and will further focus on possibly similar cases of local products making use of innovative financial tools.

Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

My name is bond, Pecorino Bond

Modaffari

2020

BFJ

“…Using a competitiveness index found many differences in efficiency, exports and subsidies referring to the agricultural firms. Finally, Kontogeorgos et al (2017) studying the performance of the Greek cheese industry for the 2006-2011 period, concluded that the smaller firms presented the most significant efficiency and profitability losses.…”

Section: Agricultural Policy Viewpointsmentioning

confidence: 99%

Food and beverages industry competitiveness in economic turbulence

Konstantinidis

Natos

Mattas

2019

BFJ

Purpose In the midst of the Greek economic and financial crisis, food and beverage firms constitute one of the most dynamic parts of the Greek economy proved resilient in conditions of economic turbulence. The purpose of this paper is to assess the competitiveness of the Greek food and beverage firms within the context of turbulent economic conditions and draw the relevant entailed agricultural policy viewpoints. Design/methodology/approach The analysis is based on competitiveness measures such as profitability and market share utilizing a sample of 550 firms which published their annual balance sheets the 2008–2012 period. The analysis takes place with the use of a simultaneous equations tobit model. Findings The main results show that market share, profitability and capital intensity affect positively both on market share and profitability, while operating costs have a negative and statistically significant effect on profitability. The rate of growth affects positively and statistically significant on profitability while the index of loans does not affect on market share. As the results indicate, food and beverages industry has proven resilient in conditions of economic turbulence without direct policy measures or subsidies. Originality/value Among other factors, the evolution of agricultural policy is affecting decisively the competitiveness of agro-food sector (Chaddad and Jank, 2006; Banse et al., 1999). Nevertheless, food competitiveness is significantly shaped and influenced within the broad economic climate of a country, region or the whole world. Thus, the present study tries to assess the competitiveness of Greek food and beverages sector in conditions of macroeconomic turbulence and draw the relevant entailed agricultural policy viewpoints.

“…Empirically, the effects of the crisis on firms' profitability have been explored by many researchers -for instance, Kontogeorgos et al (2017) and Panagiotako-poulou et al (2020). There are also some studies, such as those of Bruni et al (2014) and Alcalde-Fradejas and Ramírez-Alesón (2015), focusing on the differences of the profit-related indicators between the upturn period and the crisis period.…”

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confidence: 99%

“…Notta and Vlachvei (2014) not only compare the performance of Greek food manufacturing firms before and during the economic crisis periods but also explore the differences in profitability between these two periods for Greek dairy firms. The research of Kontogeorgos et al (2017) showed that the economic crisis negatively affected the profitability of the Greek cheese industry, especially the smaller businesses.…”

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confidence: 99%

An analysis of factors affecting the profits of new firms in Spain: Evidence from the food industry

Tong¹,

Solé²

2022

AGR ECON-CZECH

Using the logistic model, this article investigates the influence of financial factors on gaining profits for new firms in the Spanish food industry. Specifically, the firms founded separately during the crisis period and during the postcrisis period are observed for their first three years. The findings suggest that indebtedness (for both periods), previous profitability (for the postcrisis period) and accounts payable (for the crisis period) were most frequently statistically significant in the logistic model. Hence, for new firms, controlling debt burden, accumulating internally generated funds and using payables to establish business relationships can help to gain profits. Firm size and asset rotation were significant in the first year (especially during the postcrisis period), with a positive relationship to profits. Given that the food industry is highly competitive, enlarging firm size to reach efficiencies of scale and using a low-price strategy with high asset rotation to obtain market share are effective marketing strategies for new firms. This article contributes to the empirical studies about the financial effects on new firms' profits in the food industry; it can also help potential entrepreneurs make better decisions about starting new businesses and help to manage new firms better in different macroeconomic environments.