Competitiveness of the EU dairy industry

Competitiveness of the EU dairy industry

The cases in the developed database are far from exhaustive. First, not all

available cases are included. Dairy Innovation issues 8 till 12 and 14 are not

analysed. The changes in the distribution of cases over countries, firms, and

types of innovation did not change much after analysing the first 5 issues of

Dairy Innovation. The limited available resources are directed to analysing the

data. Second, we used just two sources.

Finally, it should be mentioned that the database does not provide an overview

of all new product launches. In our database, 'only' 739 cases are included,

whereas Innova already mentioned 4,721 cases, which is also not

exhaustive. Furthermore, 'innovation' is defined broader than product launches.

Our conclusion is that the number of cases and a more or less similar distribution

over countries between the three different sources gives a sound foundation

to use this database as a representation of innovations in the dairy industry.

2.3 Business dynamics

This study also covers the business dynamics of the dairy industry. In studying

the dynamics of the dairy processing industry the focus is on entry, exit and

firm growth rates, which are explained by financial and other firm-specific and

industry variables. The dynamics in the industry are partly determined by interaction

of idiosyncratic firm characteristics and turnover of firms (entry and exit).

For instance, a firm's growth is governed by financial structure (internal and/or

external finance). Hence, access to both internal and external finance sources

have influence on the size and growth dynamics of firms. High entry may indicate

the presence of profit in the industry while capital stock in the industry may

serve as entry barrier for new entrants as new entrants may lack financial capacity

to invest in technology and expansion. These dynamics of entry, growth

and exit, to our knowledge, have not been studied, yet are specific to the EU

dairy processing industry. Until now, existing studies have generally been applied

to food manufacturing industries or at more aggregate level across many

industries. These may not identify peculiarities in the dynamics of dairy processing

firms which are important for new policy formulation or application of existing

policy. Therefore, it is crucial and relevant to study how firm-related factors

play complex roles in the dynamics of dairy processing firms.

This section describes the country selection, source, and type of data. The

first part discusses the selected countries and how and why they are selected

into the study. The second part explains the type of data we use to achieve our


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