Labour Productivity and Competitiveness of SMEs in Food Industry

Labour productivity is considered a significant factor influencing the long-term competitiveness of enterprises. The paper focuses on the link between productivity of labour and competitiveness of Czech SMEs in the food production. The research was focused on 160 Czech companies in food industry. Competitiveness is expressed through selected financial indicators (Return on assets, Return on Sales, Current Liquidity, Altman - ZETA model, model IN05). The relationship between labour productivity and selected competitiveness indicators were examined through correlation and regression analysis. It has been found that the link between labour productivity and competitiveness depends heavily on defining indicators for competitiveness. The strongest correlation was found between labour productivity and competitiveness expressed by indicator return on sales. To measure the competitiveness of SMEs indicators of profitability appear to be the most appropriate, namely the indicator of ROA and ROS. The importance of labour productivity is increasing due to high wage growth which can lead to losing competitiveness for Czech enterprises.