Profit Persistence in the Food Industry: Evidence from five European Countries

Agribusiness,

Abnormal profits and profit persistence: evidence from the European food industry

This thesis comprises three papers that aim to analyze the phenomenon of firm profits in the European food industry that differ from the competitive norm either at a specific point in time or over longer time periods. The thesis adds to existing literature as it is one of the first studies of this type that directly focuses on the European food industry. Following an extended introduction, the first paper estimates the relative importance of firm, industry, country and year effects as drivers for profit deviations from the competitive norm at a specific point in time which are also commonly named ‘abnormal profits’. Besides conventional approaches such as ANOVA or components of variance, a hierarchical linear model (HLM) is implemented. The HLM approach additionally provides the possibility to estimate the impact of structural firm and industry variables on the degree of abnormal profits. All three approaches lead to the result that firm effects are the most important driver for abnormal profits while industry effects only play a minor role. Among the structural firm and industry variables it is in particular the size of firms’ that positively influences the degree of abnormal profits. On the other hand, firm risk and age as well as the growth rate of the industry in which firms operate have a negative impact. While the first paper focuses on abnormal profits at a specific point in time, the second paper analyzes the persistence of abnormal firm profits over longer time periods. This analysis is based on autoregressive models (AR) as well as Arellano-Bond dynamic panel estimation. Both approaches additionally allow for the identification of the firm and industry characteristics that determine the degree of profit persistence. The estimation reveals that a significant number of firms generate abnormal profits that persist in the long run. However, as competition among food industry firms is strong and concentration in the downstream market is high, persistence in abnormal profits in the food industry tends to be lower in comparison to other manufacturing sectors. Further characteristics that have a negative influence on the degree of persistence are firm age and risk as well as the industries R&D intensity. Similar to the occurrence of abnormal profits at a specific point in time, firm size is estimated to have a positive impact on the persistence of such profits. The first two papers of the thesis are based on a sample of 5,494 food processors from the five countries: Belgium, France, Italy, Spain and the United Kingdom. The third paper also uses AR models and dynamic panel estimation to analyze a sample of 590 dairy processors from the same five countries. Here the dairy industry was chosen not only because of its economic importance within the food industry but also due to its special structural features such as a high number of cooperatives and a strong regulation of economic activity by the Common Agricultural Policy (CAP). The AR models reveal that cooperatives, which account for approximately 20 % of all firms in the sector, are not predominantly profit oriented. Similar to the entire food industry the results indicate strong competition as the degree of persistence remains low even when cooperatives are removed from the sample. Again firm size turns out to be an important driver for persistence. Firm age and risk as well as growth and R&D investment of the sector have a negative impact. The same holds for the level of concentration in the retail sector which is an indicator of the retailers’ bargaining power.Abnormale Gewinne und deren Persistenz: Eine Analyse der europäischen Lebensmittelindustrie Die vorliegende Dissertation untersucht die Europäische Lebensmittelindustrie im Hinblick auf Unternehmensgewinne, welche von der Wettbewerbsnorm abweichen. Hierbei wird im Rahmen dreier wissenschaftlicher Papiere sowohl das Auftreten solcher ‚abnormalen‘ Gewinne zu einem bestimmten Zeitpunkt als auch deren Persistenz über längere Zeitperioden analysiert. Da es sich um eine der ersten Studien dieser Art handelt, welche sich ausschließlich mit Firmen der europäischen Lebensmittelindustrie befasst, liefert diese Dissertation einen wichtigen Beitrag zur Literatur. Im Anschluss an eine ausführliche Einleitung wird im ersten Papier der Einfluss von Firmen-, Industrie-, Jahres- und Ländereffekten auf das Ausmaß der abnormalen Gewinne analysiert. Die Schätzung der Effektklassen erfolgt hierbei sowohl auf Basis konventioneller Methoden wie ANOVA oder Varianzkomponentenanalyse als auch durch ein hierarchisches, lineares Modell (HLM). Der HLM-Ansatz bietet darüber hinaus die Möglichkeit den Einfluss struktureller Firmen- und Industrievariablen auf die abnormalen Gewinne zu schätzen. Die drei Methoden führen zu dem Ergebnis, dass Firmeneffekte der wichtigste Einflussfaktor sind wohingegen Industrieeffekte eine vernachlässigbare Rolle spielen. Unter den strukturellen Variablen stellt sich die Firmengröße als positiver Einflussfaktor heraus. Firmenrisiko und Alter sowie die Wachstumsrate der Industrie hingegen haben einen negativen Einfluss. Während im ersten Papier das Auftreten abnormaler Gewinne zu einem bestimmten Zeitpunkt analysiert wird, befasst sich das zweite Papier mit der Persistenz abnormaler Gewinne über längere Zeitperioden. Diese Analyse basiert sowohl auf autoregressiven Modellen (AR) sowie einem dynamischen Panelmodell. Beide Ansätze ermöglichen es zusätzlich den Einfluss struktureller Firmen- und Industrievariablen auf die Höhe der Profitpersistenz zu bestimmen. Die Analyse führt zu dem Ergebnis, dass eine hohe Anzahl an Firmen langfristig abnormale Gewinne erwirtschaftet. Jedoch führen starker Wettbewerb und hohe Konzentration im Lebensmitteleinzelhandel dazu, dass das Ausmaß der Persistenz geringer ausfällt als in anderen Industriesektoren. Des Weiteren stellen sich Firmenrisiko, Firmenalter sowie der F&E Aufwand der Industrie als negative Einflussgrößen heraus. Die Firmengröße hingegen hat einen positiven Einfluss auf das Ausmaß der Persistenz. Die ersten beiden Papiere basieren auf einer Stichprobe von 5.494 Lebensmittelproduzenten aus den fünf Ländern Belgien, Frankreich, Italien, Spanien und Großbritannien. Im dritten Papier wird hingegen eine Stichprobe von 590 Firmen des Milchsektors im Hinblick auf Profitpersistenz analysiert. Der Milchsektor wurde hierbei zum einen aufgrund seiner hohen wirtschaftlichen Relevanz im Ernährungsgewerbe als auch aufgrund seiner speziellen strukturellen Charakteristika ausgewählt. Zu diesen zählen u.a. eine hohe Anzahl an Genossenschaften sowie eine starke Regulierung durch die Gemeinsame Agrarpolitik (GAP) der EU. Die AR Modelle führen zu dem Ergebnis, dass Genossenschaften, welche in etwa einen Anteil von 20 % der Firmen im Sektor ausmachen, nicht gewinnorientiert sind. Analog zur gesamten Lebensmittelindustrie deuten die Ergebnisse auf eine hohe Wettbewerbsintensität, da das Ausmaß der Persistenz auch nach einem Ausschluss der Genossenschaften aus der Analyse gering ausfällt. Auch im Milchsektor stellt sich Firmengröße als positiver Einflussfaktor heraus, wohingegen Firmenrisiko, -alter sowie das Wachstum und die F&E Aufwendungen des Sektors einen negativen Einfluss haben. Gleiches gilt für die Konzentration im Lebensmitteleinzelhandel, welche als Indikator für dessen Verhandlungsmacht gesehen werden kann

Analysis of the Hydrogen-rich Magnetic White Dwarfs in the SDSS

We have calculated optical spectra of hydrogen-rich (DA) white dwarfs with magnetic field strengths between 1 MG and 1000 MG for temperatures between 7000 K and 50000 K. Through a least-squares minimization scheme with an evolutionary algorithm, we have analyzed the spectra of 114 magnetic DAs from the SDSS (95 previously published plus 14 newly discovered within SDSS, and five discovered by SEGUE). Since we were limited to a single spectrum for each object we used only centered magnetic dipoles or dipoles which were shifted along the magnetic dipole axis. We also statistically investigated the distribution of magnetic-field strengths and geometries of our sample.Comment: to appear in the proceedings of the 16th European Workshop on White Dwarfs, Barcelona, 200

Contract-based Digital Twin Synthesis for Autonomous Safety Critical Systems

The development of Digital Twins is a complex process. The complexity increases with the autonomy and networking of the system under consideration. However, progressive scenarios in the area of smart farming or platooning in road traffic in particular require reliable Digital Twins that can consider safety-critical aspects. Previous approaches do not consider this and are also not suitable due to the often manual construction. We present an approach based on a well-defined contract-based engineering that automatically synthesizes the complex interaction with the system under consideration by preserving safety and liveness properties

On the splitting principle for cohomoligical invariants of reflection groups

Let k0 be a field of characteristic not two, (V, b) a finite-dimensional regular bilinear space over k0, and W a subgroup of the orthogonal group of (V, b) with the property that the subring of W-invariants of the symmetric algebra of V is a polynomial algebra over k0. We prove that Serre’s splitting principle holds for cohomological invariants of W with values in Rost’s cycle modules

Uniform approximation of homeomorphisms by diffeomorphisms

We prove that a compactly supported homeomorphism of a smooth manifold of dimension greater or equal to 5 can be approximated uniformly by compactly supported diffeomorphisms if and only if it is isotopic to a diffeomorphism. If the given homeomorphism is in addition volume preserving, then it can be approximated uniformly by volume preserving diffeomorphisms.Comment: v4: 5 pages; long overdue revision; clarified and improved statements, notation, and proofs. The main theorem may already be known, but I have not been able to find a precise reference. After talking to a number of topologists without getting a satisfactory answer, I decided to write up the proof myself. Comments and references welcom

An OPC UA-based industrial Big Data architecture

Industry 4.0 factories are complex and data-driven. Data is yielded from many sources, including sensors, PLCs, and other devices, but also from IT, like ERP or CRM systems. We ask how to collect and process this data in a way, such that it includes metadata and can be used for industrial analytics or to derive intelligent support systems. This paper describes a new, query model based approach, which uses a big data architecture to capture data from various sources using OPC UA as a foundation. It buffers and preprocesses the information for the purpose of harmonizing and providing a holistic state space of a factory, as well as mappings to the current state of a production site. That information can be made available to multiple processing sinks, decoupled from the data sources, which enables them to work with the information without interfering with devices of the production, disturbing the network devices they are working in, or influencing the production process negatively. Metadata and connected semantic information is kept throughout the process, allowing to feed algorithms with meaningful data, so that it can be accessed in its entirety to perform time series analysis, machine learning or similar evaluations as well as replaying the data from the buffer for repeatable simulations

Analysis of hydrogen-rich magnetic white dwarfs detected in the Sloan Digital Sky Survey

Context A large number of magnetic white dwarfs discovered in the SDSS have so far only been analyzed by visual comparison of the observations with relatively simple models of the radiation transport in a magnetised stellar atmosphere. Aims We model the structure of the surface magnetic fields of the hydrogen-rich white dwarfs in the SDSS. Methods We calculated a grid of state-of-the-art theoretical optical spectra of hydrogen-rich magnetic white dwarfs (WDs) with magnetic field strengths of between 1 MG and 1200 MG for different angles between the magnetic field vector and the line of sight,and for effective temperatures between 7000 K and 50 000 K. We used a least squares minimization scheme with an evolutionary algorithm to find the best-fit magnetic field geometry of the observed data. We used centered dipoles or dipoles that had been shifted along the dipole axis to model the coadded SDSS fiber spectrum of each object. Result We analyzed the spectra of all known magnetic hydrogen-rich (DA) WDs from the SDSS (97 previously published, plus 44 newly discovered) and also investigated the statistical properties of the magnetic field geometries of this sample. Conclusions The total number of known magnetic white dwarfs has already been more than tripled by the SDSS and more objects are expected after more systematic searches. The magnetic fields have strengths of between ≈1 and 900 MG. Our results further support the claims that Ap/Bp population is insufficient in generating the numbers and field strength distributions of the observed MWDs, and that of either another source of progenitor types or binary evolution is needed. Clear indications of non-centered dipoles exist in about ∼50%, of the objects which is consistent with the magnetic field distribution observed in Ap/Bp stars

Netzpolitik - ein unmögliches Unterfangen für den Staat?

'Das Internet stellt mit seinen Charakteristika Konvergenz und Transnationalität ein Regulierungsproblem für den Staat auf inhaltlicher Ebene dar. Es fehlen altbewährte Legitimationsgrundlagen für die inhaltliche Regulierung der Medienmärkte. Dieser Beitrag versucht anhand der Analyse des schwedischen Regulierungsmodells auf der Basis medienökonomischer Theorien zu zeigen, wie Inhalte des Internets reguliert werden sollten. Der Vergleich des Internets mit den klassischen Medien (Presse und Rundfunk) zeigt, dass eine Abkehr von traditionellen Regulierungsschemata unausweichlich ist.' (Autorenreferat