Exploring the factors of efficiency in German and Ukrainian wineries

ABSTRACT

The paper is devoted to the evaluation and comparison of the efficiency of winemaking in Germany and Ukraine in order to find the key factors of efficiency of wine business in these countries. The models of data envelopment analysis (DEA), correlation and other tools of data analysis are used to analyse the efficiency of wineries in two countries. Returns to scale, scale efficiency, super-efficiency and some other indicators are examined. The study is based on the sample including 36 wineries of Germany and Ukraine. The hypothesis about a higher relative efficiency of winemaking in Germany in comparison with Ukrainian winemaking was confirmed analytically. Relatively a high average scale efficiency score indicates a good potential (above 30%) for efficiency growth due to the optimization of a scale of production and sales. Generally, winemaking in Germany and Ukraine has increasing returns to scale. It was found to be the most efficient combination of the size and legal form of business organization for wine business in Germany.

KEYWORDS:

• Efficiency
• winery
• key factors
• data envelopment analysis
• Germany
• Ukraine

Acknowledgements

The author expresses his gratitude to the German Academic Exchange Service (DAAD), the Geisenheim University (Germany) and personally Prof. Dr habil. Jon H. Hanf for their support and collaboration.

Disclosure statement

No potential conflict of interest was reported by the author.

ORCID

Anatoliy G. Goncharuk http://orcid.org/0000-0001-9870-4679