What is it about?

What are drivers of productivity of food companies across sectors and countries?

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Why is it important?

The food manufacturing sector is essential in providing daily foods for citizens by turning agricultural crops into edible foods for humans. From the supply side, the food industry is one of the important production sectors in the economy because it is the largest economic sector within manufacturing in many countries. In addition, from the demand side, food spending often accounts for a significant portion of household budgets all over the world, particularly for low-income households. Furthermore, during the COVID-19 lockdown and amid economic recovery from the pandemic, food insecurity has risen in many countries. Therefore, it has become increasingly important to improve productivity of food production for the well-being of human beings.


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.

Dr. Ryota Nakatani
International Monetary Fund

Read the Original

This page is a summary of: Food companies' productivity dynamics: Exploring the role of intangible assets, Agribusiness, August 2023, Wiley, DOI: 10.1002/agr.21839.
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