The returns to scale analysis in the basic industry enterprises in the Slovak Republic

Abstract

The analysis in field of the returns of scale is an important indicator which denotes if it is effective for the analyzed companies to increase the input exploitation to expand the production program with the aim to reach higher profits than invested inputs. According to this reason, the objective of the research is the analysis of return to scale in the basic industry enterprises in the Slovak Republic. During the whole analysed period, there was estimated the most numerous group of companies which occurred in the area of decreasing returns to scale. This fact confirmed that the total input exploitation in agricultural companies is in a higher measure not profitable, because in comparison with production inputs, lower profits were reached. On the basis of these results, it is not possible to exactly estimate which inputs are indispensable to optimize (for a more specific estimation, it is necessary to apply the non-radial DEA methods), despite the fact that there was evidently confirmed the low measure of input profitability.

Keywords

• data envelopment analysis (dea)
• returns to scale
• agricultural enterprises
• basic industry