Efficiency analysis of sausage industry: Evidence from Greece

The article analyzes the technical and scale efficiency of Greek sausage companies for the period of 1994 to 2007, by using a bootstrapped data enveloped analysis. The motivation for employing the bootstrapping approach stems from the need to improve the accuracy of the conventional DEA model. The results suggested that technical inefficiencies were present and increased over the considered period in the sample of firms. On the contrary, the scale efficiency analysis showed that the majority of sample enterprises were operating nearly optimal scale during the study period, while in the same time, the number of scale inefficient firms decreased by using increasing return technology. Results also revealed that small firm size was not a barrier for achieving technical and scale efficiency. The inefficiencies in Greek sausage industry were mainly due to managerial failure to fully exploit potential technology. Some policy applications derived from these findings. Management should apply new methods of decreasing costs and excess capital usage, while policy-makers should propose adequate improvement policies of performance.