Are wine producers with subsidies more technically efficient?

Abstract

The article analyses the technical efficiency of enterprises producing wine in the Czech Republic in the context of provided subsidies. In this paper only the effect of Rural Development Programme subsidies (measure 1.1.3 in 2007-2013 and 4.2.1 in following RDP 2014-2020) are analyzed, where wine producers belong to the main recipients. We used unbalanced data set for the time period from 1998 to 2016. The main aim of this paper is to evaluate the technical efficiency of wine producers and to figure out whether there are differences between supported and non-supported firms - according to the size of enterprise and region. The true fixed effect model was used to do the analysis. Supported producers in general were more technically efficient, but this result was not statistically significant. By region distribution, supported firms were also more efficient, but not significantly. The same result was true for the distribution according to the size. To summarize, the effect of support in this sector is not significant.