THE CZECH BREWING INDUSTRY: IS THERE A RELATIONSHIP BETWEEN FIRM EFFICIENCY AND FIRM SIZE?

Abstract

Background: Being effective is very important for any organisation. With a given number of inputs, more efficient companies can create more outputs than less efficient ones leading to better use of resources. Improving efficiency increases firm competitiveness. This paper focuses on the link between the firm�s economic efficiency and firm size. Only a few studies are examining this relationship, and the authors of this article revealed no study investigating this link on data of the Czech companies. Methods: Data for our research were collected from the Albertina database for the year 2018 and the Czech brewing industry. The efficiency was measured via two Data envelopment analysis (DEA) models. The first one is based on the constant returns to scale, and the second one works with variable returns to scale. For assessing the link between economic efficiency and firm size, the Pearson correlation coefficient was calculated. Sales and total assets were employed as indicators for measuring firm size. Results: The results reveal that there is no relationship between firm economic efficiency and firm size. The Pearson correlation coefficients between all efficiency scores and firm size indicators were positive but not statistically significant. Conclusions: The article ensures knowledge useful to researchers, managers or owners of companies in the Czech brewing industry. The study reveals that larger companies are not more efficient than their smaller counterparts or vice versa in the Czech brewing industry.