New Economics Papers
on Efficiency and Productivity
Issue of 2012‒06‒25
43 papers chosen by

  1. Dairy productivity growth, efficiency change and technological progress in Victoria By Karanja, Francis; Gilmour, Daniel; Fraser, Iain
  2. Heterogeneity of total factor productivity across Latin American countries : evidence from manufacturing firms. By Daniel Kapp; Alan Sánchez
  3. Scale Efficiency in Organic and Conventional Dairy Farming By Salhofer, Klaus; Kargiannis, Giannis; Sinabell, Franz
  4. Analysis of farm household technical efficiency in Northern Ghana using bootstrap DEA By Abatania, Luke N.; Hailu, Atakelty; Mugera, Amin W.
  5. A Non-Parametric Analysis of Rice Production Efficiency in Sri Lanka By Thibbotuwawa, Manoj; Mugera, Amin W.; White, Benedict
  6. Food Safety Regulation and Firm Productivity: Evidence from the French Food Industry By Requillart, Vincent; Nauges, Celine; Simioni, Michel; Bontemps, Christophe
  7. Efficiency of Indian Commercial Banks: The Post-Reform Experience from Mergers & Acquisitions By Bhattacharyya, Surajit; Chatri, Ankit
  8. Economic Performance Measures of Southeastern U.S. Cow-Calf Farms: Which Types of Farms Are the Most Efficient? By Qushim, Berdikul; Gillespie, Jeffrey M.; Nehring, Richard F.
  9. The Sahel’s Silent Maize Revolution: Analyzing Maize Productivity in Mali at the Farm-level By Foltz, Jeremy D.; Aldana, Ursula; Laris, Paul
  10. The Impact of Debt Structure on the Production Efficiency of Broadcare Farms in Western Australia By Mugera, Amin W.
  11. The evolution of the scientific productivity of highly productive economist By Raquel Carrasco; Javier Ruiz-Castillo
  12. Technical Efficiency and the Probability of Bank Failure among Agricultural and Non-Agricultural Banks By Li, Xiaofei; Escalante, Cesar L.; Epperson, James E.; Gunter, Lewell F.
  13. Input Specific Efficiency Measures Using Bayesian Stochastic Frontier Analysis By Tokovenko, Oleksiy; Shaik, Saleem
  14. Wheat Yield Response: On-farm Management versus Breeder Contributions By Michalski, Joel; McCracken, Vicki A.
  16. Does Institutional Quality Affect Firm Performance? Insights from a Semi-Parametric Approach By Sumon Bhaumik; Ralitza Dimova; Subal C. Kumbhakar; Kai Sun
  17. Incorporating "Bads" and "Goods" in the Measurement of Agricultural Productivity Growth in the U.S. By Plesha, Nataliya; Ray, Subhash C.; Nehring, Richard F.; Ball, Eldon
  18. How does Population Density affect Agricultural Productivity? Evidence from Ethiopia By Anna Leigh Josephson; Jacob Ricker-Gilbert; Raymond Florax; Jordan Chamberlain; Derek Heady
  19. Nonparametric Estimation of Crop Yield Distributions: A Panel Data Approach By Wu, Ximing; Zhang, Yu Yvette
  20. The Impact of Capital Measurement Error Correction on Firm-Level Production Function Estimation By Lubomir Lizal; Kamil Galuščák
  21. Innovative capacity and productivity: an empirical analysis of Australian grain growers By Nossal, Katarina
  22. Are Critical Access Hospitals Less Efficient than Non-Converting, Prospectively Paid Rural Hospitals? By Nedelea, I. Cristian; Fannin, James Matthew
  23. Performance evaluation of Tour de France cycling teams using Data Envelopment Analysis By Rogge, Nicky; Van Reeth, Daam; Van Puyenbroeck, Tom
  24. Sources of measured agricultural yield difference By Pieralli, Simone
  25. Research and agricultural productivity in Indonesia By Warr, Peter G.
  26. Economic Efficiency Adjusted for Risk Preferences By Yeager, Elizabeth A.; Langemeier, Michael R.
  27. Complementarities in Production Technologies: An Empirical Analysis of the Dairy Industry By An, Henry
  28. Financial performance in manufacturing firms: a comparison between parametric and non parametric approaches By Eleonora Bartoloni; Maurizio Baussola
  29. The Trade-Productivity Nexus in the European Economy By Neil Foster; Roman Stöllinger; Carlo Altomonte; Richard Kneller
  30. Off-farm Employment and Farming Efficiency in Modern Agriculture: A Dynamic Panel Analysis By Bjornsen, Hild-Marte; Mishra, Ashok K.
  31. Effect of Contract Farming on the Farmers' Average Return - The Case of the Grain Industry in the U.S.A. By Hu, Wu-Yueh
  32. The Potential Effects of Climate Change on the Productivity of U.S. Dairies By Sneeringer, Stacy E.; Key, Nigel D.
  33. Producer Behaviour and Agri-Environmental Policies: A Directional Distance based Matching Approach By Sauer, Johannes; Walsh, John; Zilberman, David
  34. Is there a Minimum Required Landholding for Food and Nutritional Self-Sufficiency? By Reynolds, Travis William; Anderson, C. Leigh; Gugerty, Mary Kay
  35. Management changes and vessel-level technical efficiency in the Eastern Tuna and Billfish Fishery: a stochastic frontier analysis By New, Robert
  36. Land use regulation and productivity - Land matters: Evidence from a UK Supermarket chain By Cheshire, Paul C.; Hilber, Christian; Kaplanis, Ioannis
  37. Borders and Barriers: Spatial Analysis of Agricultural Output Spillovers at the Grid Cell Level By Motamed, Mesbah J.; Florax, Raymond; Masters, William A.
  38. Tenure and Technical Efficiency Among Philippine Rice Farmers By Michler, Jeffrey D.; Shively, Gerald
  39. The Impact of Climate Variability on the Production Efficiency and Incomes of Kansas Farms By Mugera, Amin W.; Zereyesus, Yacob A.
  40. The Effects of Integrated Pest Management Techniques (IPM) Farmer Field Schools on Groundnut Productivity: Evidence from Ghana By Carlberg, Eric; Kostandini, Genti; Dankyi, Awere
  41. Total Factor Productivity & Foreign direct investment in OECD countries - A Paneldata Econometric Analysis By Neil Dias Karunaratne
  42. Estimating the cost of improving quality in electric distribution: a parametruc distance function approach By Tim Coelli; Axel Gautier; Sergio Perelman; Roxana Saplacan-Pop
  43. An Evaluation of technical efficiency of small farms households in Chuong My District, Ha Tay Province, Vietnam By Vu, Yen Hoang; Meyers, William H.

  1. By: Karanja, Francis; Gilmour, Daniel; Fraser, Iain
    Abstract: The research in this paper considers the question of the possible sources of total factor productivity (TFP) change in the Victorian dairy sector between 2007–08 and 2010–11. The analysis explores the components of TFP growth for a sample of dairy enterprises in Victoria using farm monitor data collected by the Department of Primary Industries Victoria (DPI). Specifically, the research considers the contributions of technological progress and technical efficiency changes to TFP growth using the Malmquist index based on a decomposition of TFP change. The productivity estimates are compared to financial measures of farm performance and to qualitative farm performance assessments made by DPI field staff.
    Keywords: dairy, Malmquist, technical efficiency change, technological change, total factor productivity, Victoria, Livestock Production/Industries, Research and Development/Tech Change/Emerging Technologies,
    Date: 2012
  2. By: Daniel Kapp (Centre d'Economie de la Sorbonne - Paris School of Economics); Alan Sánchez (Central Bank of Peru - Economic Research Division)
    Abstract: We use a firm production function approach to generate estimates of total factor productivity (TFP) and labor productivity in the manufacturing sector for a group of Latin American countries. We exploit these estimates to study the relative position of countries within this sector and to explore the main correlates of firm productivity. We find that while the exact ranking of average TPF is sensitive to the underlying form of the production function, Chile and Argentina average level of TFP is found to be consistenly above that of other countries, while Bolivia firms always appears at the bottom of the distribution. While other aspects matter, the main factors explaining differences in productivity across firms are related to country-level, not firm-level, characteristics.
    Keywords: Total factor productivity, multi factor productivity, labor productivity, Latin America.
    JEL: D24 D22 C23
    Date: 2012–02
  3. By: Salhofer, Klaus; Kargiannis, Giannis; Sinabell, Franz
    Abstract: Recently, several studies compared the performance of conventional and organic farms. Most studies concentrated on technical efficiency. In this paper we add to this literature by also comparing the scale efficiency of conventional and organic milk farms in Austria during the period 1997-2002. To do so we utilize a bilateral production frontier that includes both production technologies and Green’s (1995a,b) true fixed effects model to account for firm specific time-invariant heterogeneity and technical inefficiency. We find both groups of farms to be on average equally technical efficient (when compared to their production frontier), but conventional farms being on average considerably more scale efficient. However, while scale efficiency remained constant over time for conventional farms it increased for organic farms which seem to catch up.
    Keywords: scale efficiency, conventional vs. organic farming, milk production, Austria, Production Economics, Q12, D20,
    Date: 2012
  4. By: Abatania, Luke N.; Hailu, Atakelty; Mugera, Amin W.
    Abstract: Crop production is the main source of livelihood for households in Northern Ghana. The government is committed to improving crop production and knowledge about the technical efficiency of crop farms is essential in guiding policy decisions. This paper examined the technical efficiency of 189 crop farms in Northern Ghana using data envelopment analysis (DEA) with bootstrapping. We found that bias-corrected average technical efficiency of the sample farms is 77.26%. The estimated scale efficiency is 94.21%. In a second stage regression, we found that hired labour, geographical location of farms, gender and age of head of household significantly affect technical efficiency. Policy implications of the results are discussed.
    Keywords: Technical efficiency, DEA, bootstrap, Ghana, OLS regression., Farm Management,
    Date: 2012–02
  5. By: Thibbotuwawa, Manoj; Mugera, Amin W.; White, Benedict
    Abstract: This article investigates the production efficiency of rice farming in Sri Lanka using cross section survey data of 90 farms. Past studies on rice farming have mostly focused on technical efficiency (TE). Here, we examine technical efficiency, allocative efficiency (AE) and cost efficiency (CE) using the data envelopment analysis (DEA) approach. On average, the farms were 87% technically efficient; irrigated farms were more efficient (88%) than rain-fed farms (82%). Average cost, allocative and scale efficiencies were 73%, 84% and 87%. Bias corrected TE estimate suggests an expected output expansion of 25% with a given input combination in order to become fully efficient as opposed to 16% based on the original estimates. In addition, a second stage Tobit regression shows that efficiency is influenced by farm size, water security, ownership, seed quality, family labour endowment and female labour participation.
    Keywords: technical efficiency, cost efficiency, bootstrap, rice farming, Sri Lanka, Crop Production/Industries,
    Date: 2012–02
  6. By: Requillart, Vincent; Nauges, Celine; Simioni, Michel; Bontemps, Christophe
    Abstract: The purpose of this article is to assess whether food safety regulations imposed by the European Union in the 2000s may have induced a slow-down in the productivity of firms in the food processing sector. The impact of regulations on costs and productivity has seldom been studied. This article contributes to the literature by measuring productivity change using a panel of French food processing firms for the years 1996 to 2006. To do so, we develop an original iterative testing procedure based on the comparison of the distribution of efficiency scores of a set of firms. Our results confirm that productivity decreased in the poultry processing industry at the time when safety regulation was reinforced.
    Keywords: total factor productivity, safety regulation, food processing sector, panel data, non-parametrics, Food Consumption/Nutrition/Food Safety, C14, D24, L66,
    Date: 2012
  7. By: Bhattacharyya, Surajit; Chatri, Ankit
    Abstract: This paper explores the impact of M&A on technical efficiency of Indian commercial banks during the second decade of reforms. We use DEA to compute the relative technical efficiency of banks that participated in M&A activities. The technical efficiency is computed under both 'common' and 'separate' frontier with the assumption of 'constant' as well as 'variable' returns to scale. We also compare the post-amalgamation efficiency scores of the participating banks with that of a control group comprising of such banks that did not undergo any consolidation since 1991. Our results indicate evidence of efficiency gains for the merging and/or acquiring banks. At the same time there are banks that have experienced deterioration in their post-M&A average efficiency levels.
    Keywords: Commercial Banking; DEA; Technical Efficiency; Control Group
    JEL: C61 G21
    Date: 2012–06–05
  8. By: Qushim, Berdikul; Gillespie, Jeffrey M.; Nehring, Richard F.
    Abstract: The objective of this study is to assess the technical efficiency and other economic performance measures of southeastern U.S. cow-calf farms. We describe and compare cow-calf operations by size, farm resource regions, and states, and measure their relative competitiveness. We estimate a Cobb- Douglas production function using stochastic production frontier (SPF) techniques. Our results suggest there is opportunity for most cow-calf operations to increase the efficiency of their operations.
    Keywords: Farm Management, Livestock Production/Industries,
    Date: 2012
  9. By: Foltz, Jeremy D.; Aldana, Ursula; Laris, Paul
    Keywords: productivity, maize, Mali, green revolution, International Development, Productivity Analysis,
    Date: 2012
  10. By: Mugera, Amin W.
    Abstract: Farming activities are often financed using debt yet empirical studies that investigate the relationship between farm debt structure and performance are still rare. In a ten years unbalanced panel (1995-2005) of Western Australia broadacre farms, we relate the impact of long-term debt, short-term debt and tax liability on farm performance measured by input-oriented technical efficiency and return on assets (ROA). To check for the robustness of our results, both data envelopment analysis (DEA) and stochastic frontier analysis (SFA) methods are employed. Results from both models are consistent: farm production efficiency is positively related to shortterm debt, tax liability and investment and negative related to off-farm income activities. Longterm debt has no effect on production efficiency and ROA.
    Keywords: farm debt structure, return on assets, input-oriented technical efficiency, broadacre farming, Western Australia., Agricultural Finance, Production Economics,
    Date: 2012
  11. By: Raquel Carrasco; Javier Ruiz-Castillo
    Abstract: This paper studies the evolution of research productivity of a sample of economists working in the best 81 departments in the world in 2007. The main novelty is that, in so far as a productivity distribution can be identified with an income distribution, we measure productivity mobility in a dynamic context using an indicator inspired in an income mobility index suggested by Chakravarty et al. (1985) for a twoperiod world. If aggregate productivity inequality increases (decreases) relative to the reference, immobile situation, then productivity mobility takes a positive (negative) sign. Productivity is measured in terms of publications, weighted by the citation impact of the journals where each article is published in the periodical literature. We study the evolution of average productivity, productivity inequality, the extent of rank reversals, and productivity mobility for seven cohorts, as well as the population as a whole. We offer new evidence confirming previous results about the heterogeneity of the evolution of productivity for top and other researchers. However, the major result is that –contrary to what was expected– for our sample of very highly productive people the effect of rank reversals between the two periods on overall productivity mobility offsets the effect of an increase in productivity inequality from the first to the second period
    Keywords: Research productivity, Income mobility, Productivity mobility, Structural and exchange mobility, Inequality decomposition
    JEL: A11 A12 B41 D63 I32
    Date: 2012–06
  12. By: Li, Xiaofei; Escalante, Cesar L.; Epperson, James E.; Gunter, Lewell F.
    Abstract: This study is designed to analyze bank failures from the technical efficiency standpoint under a stochastic cost frontier framework and evaluate the reliability of the technical efficiency measure as a determinant of the financial health of banks and probability to succeed or fail at the height of the current recessionary period. Results of this analysis confirm that successful agricultural banks have been operating more efficiently than surviving nonagricultural banks. This result helps to refute the contention that farm loans are at a relatively higher level of riskiness.
    Keywords: Agricultural Banking, Stochastic Frontier Analysis, Technical Efficiency, Agricultural Finance, G01, G21, G33,
    Date: 2012
  13. By: Tokovenko, Oleksiy; Shaik, Saleem
    Keywords: Agribusiness, Crop Production/Industries, Research and Development/Tech Change/Emerging Technologies, Research Methods/ Statistical Methods,
    Date: 2012
  14. By: Michalski, Joel; McCracken, Vicki A.
    Abstract: Data from the WSU wheat variety test program along with spatially interpolated historic weather records present a unique opportunity to compare wheat variety performance across time and Washington State geography. A key assumption in this analysis takes wheat variety to be genetically constant year-over-year. This assumption allows us to separate breeding versus farm-level productivity gains. Furthermore, across the wide variety of climate regions within Washington State, productivity gains can be measured for different climate regions, allowing a unique contribution to the body of literature attempting to differentiate the various technology contributions to farm productivity. Analysis of breeder contributions to wheat productivity gains are then applied to state-wide USDA productivity data and determine the economic benefit provided by the wheat variety improvements to average $1.8M per year (2010 dollars).
    Keywords: Crop Production/Industries, Productivity Analysis,
    Date: 2012
  15. By: Renner, Swetlana; Glauben, Thomas; Hockmann, Heinrich
    Abstract: Flexibility can be considered as a crucial factor of competitive advantage, especially under conditions of dynamically changing environments. Based on the classical microeconomic definition of flexibility, as introduced by Stigler, and some recent concepts developed in the production economics, this article proposes a primal flexibility measure for multi-product firms. When decomposed, this measure offers useful insights into possible sources of flexibility, especially by investigating the role of both scale and scope economies. This approach provides the theoretical basis to investigate the magnitude and sources of flexibility in the Polish agricultural sector during the transition period.
    Keywords: cost function, duality, input distance function, flexibility, Poland, scale economies, scope economies, Production Economics, Productivity Analysis, D24, Q12, L25,
    Date: 2012
  16. By: Sumon Bhaumik; Ralitza Dimova; Subal C. Kumbhakar; Kai Sun
    Abstract: Using a novel modeling approach, and cross-country firm level data for the textiles industry, we examine the impact of institutional quality on firm performance. Our methodology allows us to estimate the marginal impact of institutional quality on productivity of each firm. Our results bring into question conventional wisdom about the desirable characteristics of market institutions, which is based on empirical evidence about the impact of institutional quality on the average firm. We demonstrate, for example, that once both the direct impact of a change in institutional quality on total factor productivity and the indirect impact through changes in efficiency of use of factor inputs are taken into account, an increase in labor market rigidity may have a positive impact on firm output, at least for some firms. We also demonstrate that there are significant intra-country variations in the marginal impact of institutional quality, such that the characteristics of “winners” and “losers” will have to be taken into account before policy is introduced to change institutional quality in any direction.
    Keywords: Institutional quality; Firm performance; Marginal effect; Textiles industry
    JEL: C14 D24 K31 O43
    Date: 2012–02–01
  17. By: Plesha, Nataliya; Ray, Subhash C.; Nehring, Richard F.; Ball, Eldon
    Abstract: Productive utilization of resources has enabled American agriculture to supply the nation with vast quantities of food at a high level of efficiency. However, the USDA shows that 2011 pesticide expenses increased by about $100 million resulting from a slight increase of planted acres and a one-percent rise in prices paid. Some believe that increased food and fiber production has come at a cost to environmental quality. Modern pest management utilizes a wider range of appropriate pest management options despite the diversity of chemical use in agriculture. In fact, modern agriculture may suffer significant economic losses in yield and quality without intensive use of pesticides and other chemicals. This paper presents findings on the efficiency score measures with undesirable or bad outputs and the offending bad input (i.e., pesticides and fertilizers) for twelve key corn producing states, twelve key cotton producing states, and fifteen key soybean producing states using a unique panel of state-level data set for 1960-1997. Our preliminary findings indicate that the efficiency scores for corn, cotton, and soybean producing states are consistent with the pesticide risk indicators for protection of drinking water patterns discussed in Kellogg et al, 2002. In general, there is more room for reducing the bad output along with the polluting input (e.g., pesticide and fertilizer) than for expanding the good outputs (e.g., crops, livestock, and farm related output) in the major corn and soybean producing states. Only half of the 12 cotton producing states were found to be efficient over the entire period. Our findings using the updated, revised and extended through 1997 USDA data on “goods” and “bads” differ from the previous results reported in Harper et al. “New Developments in Productivity Analysis” (2001) due to the different approach (i.e., measured efficiency scores) used in this study.
    Keywords: Agricultural productivity, Good Outputs, Undesirable or bad outputs, Data envelopment analysis, Environmental Economics and Policy, Production Economics, Productivity Analysis, Q18, Q10, Q50, D24,
    Date: 2012–06–01
  18. By: Anna Leigh Josephson; Jacob Ricker-Gilbert; Raymond Florax; Jordan Chamberlain; Derek Heady
    Keywords: Community/Rural/Urban Development, International Development, Land Economics/Use, Productivity Analysis,
    Date: 2012
  19. By: Wu, Ximing; Zhang, Yu Yvette
    Abstract: We propose a flexible nonparametric density estimator for panel data. One possible areas of application is estimation of crop yield distributions whose data tend to be short panels from many geographical units. Taking into account the panel structure of the data can likely improve the efficiency of the estimation when the crop distributions share some common futures over time and cross-sectionally. We apply this method to estimate annual average crop yields of 99 Iowa counties. The results demonstrate the usefulness of the proposed method to estimate simultaneously densities from a large number of cross-sectional units.
    Keywords: crop yields, density estimation, panel data, Crop Production/Industries, Productivity Analysis, Research Methods/ Statistical Methods,
    Date: 2012
  20. By: Lubomir Lizal; Kamil Galuščák
    Abstract: Based on a large panel of Czech manufacturing firms, we estimate firm-level production functions in 2003–2007 using the Levinsohn and Petrin (2003) and Wooldridge (2009) approaches, correcting for the measurement error in capital. We show that measurement error plays a significant role in the size of the estimated capital coefficient. The capital coefficient estimate approximately doubles (depending on the particular industry) when we control for capital measurement error. Consequently, while the majority of industries exhibit constant or (in)significantly decreasing returns to scale when the standard methods are used, increasing returns cannot be rejected in some industries when the estimation is corrected for capital measurement error.
    Keywords: Measurement error, capital, firm-level data, Czech Republic.
    JEL: C23 C33 D24 O47
    Date: 2012–01–01
  21. By: Nossal, Katarina
    Abstract: Slowing productivity growth in the Australian grains industry has led to calls for increasing investment in rural R&D to advance agricultural technology. However, recent research also suggests there is strong potential to increase productivity by enhancing uptake of existing innovations. The productivity gains from innovation adoption are likely to depend on the capacity of farmers to effectively select, adapt and integrate innovations into existing farming systems. In this paper, the innovative capacity of grain growers is characterised by variables related to the farm, the farmer and their operating environment. The influence of these factors on on-­‐farm innovation adoption is tested using an ordered probit model. The relationship between innovative capacity, innovation adoption and productivity is then evaluated. The results suggest that building innovative capacity is effective in increasing agricultural productivity.
    Keywords: innovation, grain growers, ordered probit, productivity, Crop Production/Industries, Productivity Analysis,
    Date: 2012–02
  22. By: Nedelea, I. Cristian; Fannin, James Matthew
    Abstract: This study examined differences in technical efficiency between two groups of rural hospitals operating under different Medicare reimbursement systems: cost-based reimbursed Critical Access Hospitals (CAHs) and non-converting, prospectively paid (PPS) rural hospitals. To control for hospital size, two different groups of PPS rural hospitals were specified based on bed size. We use a two-stage approach, where data envelopment analysis (DEA) is used in the first stage to estimate technical efficiency. In the second stage, we estimate the effects of environmental variables (CAH status, ownership, Medicare and Medicaid) on hospital efficiency using a truncated regression with bootstrap. Density analysis of efficiency scores suggests that CAHs are more technically efficient than both groups of non-converting, PPS rural hospitals. Similarly, the results of bootstrapped truncated regression showed a positive and significant marginal effect of CAH status suggesting that CAHs are more technically efficient than non-converting, PPS rural hospitals.
    Keywords: Community/Rural/Urban Development, Health Economics and Policy,
    Date: 2012
  23. By: Rogge, Nicky (Hogeschool-Universiteit Brussel (HUB)); Van Reeth, Daam (Hogeschool-Universiteit Brussel (HUB)); Van Puyenbroeck, Tom (Hogeschool-Universiteit Brussel (HUB), KULeuven)
    Abstract: This paper uses a robust (order-m) Data Envelopment Analysis approach to evaluate the efficiency of Tour de France cycling teams for the period 2007- 2011. Since there are multiple ways in which this event can be successful for a cycling team, we take it that managers face strategic input decisions regarding team and rider characteristics. Specifically, we distinguish between ranking teams, sprint teams, and mixed teams, and compute for each of these an efficiency score as due to the team’s performance relative to similarly classified teams and an efficiency score that is the consequence of the team type. We find that ranking teams are generally more efficient than other types.
    Keywords: Data Envelopment Analysis, Tour de France, Cycling, Team Types, Performance Evaluation; Robust order-m
    Date: 2012–02
  24. By: Pieralli, Simone
    Abstract: We decompose yield difference relative to a reference level into components attributable to (1) efficiency difference, and movements along the frontier due to (2) land quality, to (3) land size, and to (4) other inputs. The production frontier is built using nonparametric methods requiring no specification of the functional form of the technology. We analyze the contributions to yield relative to a reference unit in terms of the quadripartite decomposition finding that results depend on the choice of the unit of reference. If the reference unit is chosen to be the mean, land size contributions are found to be negatively correlated to yield with usual finite moments regression methods. Also nonparamteric correlation confirms the negative sign of the relationship. If the reference unit is chosen to be the median instead, land size contributions are found to be negatively correlated to yield with usual finite moments regression methods. But nonparametric correlation is not statistically significant because many farmers have no contribution to production difference from their different land sizes. Integrated squared density difference tests show in both cases efficiency has a major role in shaping the distribution.
    Keywords: inverse land size-productivity relationship, productivity decomposition, efficiency, yield, Kenya, Land Economics/Use, Research and Development/Tech Change/Emerging Technologies, D20, C14, C43,
    Date: 2012–06–04
  25. By: Warr, Peter G.
    Abstract: Growth of total factor productivity has contributed 41 per cent of output growth in Indonesian agriculture since 1975. This study examines the extent to which publicly funded agricultural research within Indonesia has contributed to this productivity growth, while allowing for other possible determinants, including spillovers from international agricultural research, extension, weather changes, and government trade and subsidy policy. The econometric results imply a real annual rate of return to a marginal increase in Indonesian agricultural research expenditure of 27 per cent. Government-financed agricultural research explains 56 per cent of the observed increase in total factor productivity since 1975.
    Keywords: Production Economics, Research and Development/Tech Change/Emerging Technologies,
    Date: 2012
  26. By: Yeager, Elizabeth A.; Langemeier, Michael R.
    Abstract: This study investigates the impact of risk preferences on economic efficiency scores. Risk averse individuals may be less likely to adopt new technologies and have lower production levels than individuals with other risk preferences. Nonparametric techniques are used to estimate cost and revenue efficiency for a sample of Kansas farms. Each farm had a risk preference score and the scores in the sample ranged from 5 to 86 where a smaller value represents greater risk aversion. Efficiency estimates were first calculated using traditional input and output measures. Efficiency was re-estimated including the inverse risk preference score as a non-discretionary input. Comparisons were made between the characteristics of the farms with an observed efficiency score change and farms without an efficiency score change with the inclusion of inverse risk preferences. As expected, risk preference plays a role in explaining farm inefficiency. Failure to account for risk preferences overstates inefficiency and the improvements in efficiency that can be made.
    Keywords: Cost Efficiency, Revenue Efficiency, Risk Preference, Agribusiness, Farm Management, Production Economics, Risk and Uncertainty, C14, D22, D81,
    Date: 2012
  27. By: An, Henry
    Abstract: In this article, we present empirical evidence to show that a commonly held belief is likely false. Specifically, we examine the claim that three widely used dairy technologies and management practices complement the use of rbST in the sense that they increase the marginal return of rbST. Using the definition described in Milgrom and Roberts (1990) that the presence of supermodular profit or total output functions is evidence of complementarity, our results show that the use of a computerized feeding system or total mixed ration feed balance system is complementary with the use of rbST, but that this complementarity only exists for when considering the effects on feed costs per cow. We are unable to detect any complementary relationships for operating margins per hundredweight of milk, operating margins per cow, or feed costs per hundredweight of milk. These results show that having a TMR feed balance system, being a member in a DHIA, or using a computerized feed system do not necessarily increase the marginal productivity or profitability of using rbST. This paper is the first to our knowledge that uses the production function approach to estimate econometrically whether complementarities among dairy technologies exist.
    Keywords: Livestock Production/Industries, Production Economics,
    Date: 2012
  28. By: Eleonora Bartoloni (DISCE, Università Cattolica); Maurizio Baussola (DISCE, Università Cattolica)
    Abstract: This paper provides a methodological analysis of credit risk in manufacturing firms by using two different credit scoring approaches. The first is the traditional discriminant approach (DA) for bankruptcy prediction based on a logistic regression model, whereas the second, Data Envelopment Analysis (DEA), is a non-parametric approach for measuring firms’ efficiency which do es not require ex-ante information on bankrupted firms. By using a manufacturing sample of both healthy and bankrupted firms during the period 2003-2009 we provide an in-depth comparison of DA and DEA and conclude that a correct evaluation of firms’ credit worthiness is the result of successive fine tuning procedures requiring the use of multiple methodological tools.
    Keywords: Bankruptcy, Discriminant Analysis, Data Envelopment, Analysis, Credit rating
    JEL: G32 O32 L25
    Date: 2012–05
  29. By: Neil Foster; Roman Stöllinger; Carlo Altomonte; Richard Kneller
    Abstract: This FIW Special – International Economics contains a policy report on the relationship between trade and productivity in the European Economy. The reports consists of three chapters which all mainly deal with empirical evidence from firm level but with each chapter focusing on a specific aspect of the trade and productivity nexus. Chapter 1 presents some initial findings on the relationship between exporting and productivity for Austrian exporters in the manufacturing industry. Chapter 2 offers new insights into the relationship between exporting and productivity by introducing the cross-country dimension of the export behaviour and internationalisation strategies of European firms. This kind of analysis became possible due to a recently compiled cross-country firm level data set covering seven European countries. Chapter 3 focuses on the causality between exporting and productivity which is a key question also for economic policy. The chapter summarises existing results on self-selection into exporting and the learning-by-exporting hypothesis but also acknowledges that productivity growth is not only driven by within-firm productivity growth but also the reallocation of resources between firms, the entry and exit of firms as well as shifts of resources between industries.
    Keywords: firm productivity, internationalisation of firms, export premia, export starters, learning-by-exporting
    JEL: F15 F23 D22 L25
    Date: 2012–06
  30. By: Bjornsen, Hild-Marte; Mishra, Ashok K.
    Abstract: Most of the empirical literature in this area tends to analyze labor allocation decisions of economic agents using cross-sectional data. But such methods implicitly assume that model parameters are stable (constant) across firms and over time. The use of cross-sectional methods is therefore glaringly at odds with the firm-specific aspects of the theoretical models employed in labor economics. Using a large panel data this study investigates the simultaneous relationship between farming efficiency and the off-farm labor supply decisions of both farm operators and their spouses. We also account for unobserved heterogeneity and correcting for simultaneity bias in such estimation. Results reveal several interesting findings. First, farming efficiency (ratio of farm revenue to total variable cost) has a positive and negative impact on hours of off-farm work by farm operators and spouses, respectively. Second, agricultural subsidy has a negative and positive effect on off-farm work hours of farm operators and spouses, respectively. Finally, we find a dynamic relationship between off-farm labor supply and farming efficiency. Specifically, in the case of the farm operator, off-farm work first increases farming efficiency in the first period and then decreases it in the second period. On the other hand, we observe a positive correlation, for both periods, between off-farm hours worked by spouses and farming efficiency.
    Keywords: Panel, heterogeneity, simultaneity, off-farm labor, farm households, agricultural subsidy, Farm Management, Labor and Human Capital, D13, J18, J22, Q12, Q18,
    Date: 2012
  31. By: Hu, Wu-Yueh
    Abstract: In the literature, the effect of contract farming on the productivity efficiency or profitability is rarely studied, especially in the crop sector. In this paper, we use a farm-level dataset (Agriculture and Resource Management Survey) to examine the effect of contract farming on the farmers' average return for the corn, soybean and wheat producers. The results of the matching estimation show that without matching, the effect of contract farming on the average returns of the corn and soybean producers might be underestimated, and contract farming might have a negligible (statistically insignificant) effect on the average return of the wheat producer.
    Keywords: contract farming, marketing contract, average return, grain industry, Agricultural Finance, Crop Production/Industries, Q10, Q13, L14,
    Date: 2012
  32. By: Sneeringer, Stacy E.; Key, Nigel D.
    Abstract: Climate change could affect the costs and returns of livestock production by altering the thermal environment of animals thereby affecting animal health, reproduction, and the efficiency by which livestock convert feed into retained products (especially meat and milk). In the United States, concentrated livestock operations are located in a variety of climatic regions, suggesting that the industry could adapt to future changes in temperature and weather patterns resulting from global warming. However, this adaption could be costly. We use nationally representative data on dairy producers coupled with finely-scaled climate data to empirically examine how producers’ costs, returns, and production systems vary across U.S. regions as a function of the local climate.
    Keywords: livestock, climate change, dairy, temperature-humidity index, Environmental Economics and Policy, Livestock Production/Industries,
    Date: 2012–05–25
  33. By: Sauer, Johannes; Walsh, John; Zilberman, David
    Abstract: This empirical study investigates the effects of different agri-environmental schemes on individual producer behaviour. We consider the effects on production intensity, performance and structure for a sample of UK cereal farms for the period 2000 to 2009 and use the policy examples of the Environmental Stewardship Scheme (ESS) and the Nitrate Vulnerable Zones (NVZ). The econometric methodology is based on a directional distance function framework as well as the application of propensity score analysis by the use of matching estimators. We find that both schemes are effectively influencing production behaviour at individual farm level. However, agri-environmental schemes show only very minor effects on the technical and allocative efficiency of farms, hence, we can conclude that farms enrolled in agri-environmental schemes are efficiently adjusting their production decisions given the constraints by the respective scheme. Farms affected by these schemes indeed tend to become less specialised and more diversified with respect to their production structure. A voluntary type agrienvironmental scheme seems to signficantly influence producer behaviour at a far higher scale than a non-voluntary agri-environmental scheme. The methodological novelty of this research lies in the use of a sound production theory based multi-output multi-input approach to disentangle measures for production performance and structure which are then used as indicators for the robust treatment effects’ analyses.
    Keywords: Agri-Environmental Policy, PES, Distance Function, Propensity Score Matching, Institutional and Behavioral Economics, Productivity Analysis, Research Methods/ Statistical Methods, Q15, Q18, Q57, C23,
    Date: 2012
  34. By: Reynolds, Travis William; Anderson, C. Leigh; Gugerty, Mary Kay
    Keywords: Food Security and Poverty, Production Economics, Productivity Analysis,
    Date: 2012
  35. By: New, Robert
    Abstract: Changes in fishery management can influence vessels’ efficiency, thereby changing the fishery’s ability to achieve a catch target consistent with maximising net economic returns to the Australian community. The stochastic frontier method is used to analyse the vessel-­‐level technical efficiency achieved in the Eastern Tuna and Billfish Fishery over the period 2001–02 to 2010–11. A significant reduction in fleet size in this fishery following implementation of the Securing our Fishing Future structural adjustment package in 2006 is shown to have had a negligible effect on vessel-­‐level technical efficiency. Also, effort creep was avoided during the period of effort controls; 2008–09 to 2010–11. Tracking changes in technical efficiency over time can help managers of Commonwealth fisheries better achieve their objective of maximising net economic returns to the Australian community.
    Keywords: Resource /Energy Economics and Policy,
    Date: 2012–02
  36. By: Cheshire, Paul C.; Hilber, Christian; Kaplanis, Ioannis
    Abstract: We use store-specific data for a major UK supermarket chain to estimate the impact of planning on store output. Using the quasi-natural experiment of the variation in policies between England and other UK countries, we isolate the impact of Town Centre First policies. We find that space contributes directly to store productivity; and planning policies in England directly reduce output both by reducing store sizes and forcing stores onto less productive sites. We estimate that since the late 1980s planning policies have imposed a loss of output of at least 18.3 to 24.9% - more than a “lost decade’s†growth. JEL codes: D2, L51, L81, R32.
    Keywords: Economia -- Regulació, Supermercats, Planejament urbà, Gran Bretanya, 332 - Economia regional i territorial. Economia del sòl i de la vivenda,
    Date: 2012
  37. By: Motamed, Mesbah J.; Florax, Raymond; Masters, William A.
    Abstract: Much of the world's agricultural productivity growth over the past fifty years has been attributed to the international spillover of benefits from research and develop- ment (Alston, 2002). Because the impact of these spillovers often varies with distance, geography, and climate, attention has increasingly focused on measuring their spa- tial dimensions Evenson (1989). In this paper, spatial spillovers are examined in the context of country borders. Using high-resolution worldwide grid cell data covering yields for 11 major crops, we test whether spatial dependencies in agricultural yields fall in the presence of country borders, controlling for geography and climate as well as country-specific effects. Two different complementary analyses show that country borders signicantly and sizeably diminish the transmission of spatial spillovers be- tween locations. The results thus point to a clear \border eect" on an important determinant of agricultural productivity.
    Keywords: agricultural productivity, spillovers, border eects, International Relations/Trade, Productivity Analysis, Research Methods/ Statistical Methods,
    Date: 2012
  38. By: Michler, Jeffrey D.; Shively, Gerald
    Keywords: Farm Management, Research and Development/Tech Change/Emerging Technologies,
    Date: 2012
  39. By: Mugera, Amin W.; Zereyesus, Yacob A.
    Keywords: Farm Management, Production Economics,
    Date: 2012
  40. By: Carlberg, Eric; Kostandini, Genti; Dankyi, Awere
    Abstract: This study examines the impact of Integrated Pest Management-Farmer Field School (IPM-FFS) programs on groundnut production in Ghana. The program was conducted in the groundnut regions of Ghana with the goal to improve groundnut agriculture through the dissemination of information and technology to the producers. Several approaches are used to control for selection and endogeneity on household level data collected in 2011 from FFS famers and non-FFS farmers. The results suggest that farmers who participated in the IPM-FFS program have significantly higher groundnut production levels.
    Keywords: Farmer Field School, Integrated Pest Management, Groundnut, Production, Ghana, Heckman Selection Model, Farm Management,
    Date: 2012–08–12
  41. By: Neil Dias Karunaratne (School of Economics, The University of Queensland)
    Abstract: The role of FDI inflows and outflows to host countries and from the source countries emerged in the 1980s as the major vehicle technology transfer that accelerated the globalization or international integration of 25 leading OECD economies over a period of 25 years (1983-2007). Although neoclassical and endogenous growth theories provide unequivocal support for FDI flows because they generate positive externalities or spillover effects through channels of GDP growth, capital formation and R&D, the empirical evidence in support of these claims are mixed. The panel data econometrics performed using a new multiplicatively complete index of total factor productivity provide fresh insights on the cross-border FDI generated through technology transfer and other channels. The empirical findings for the OECD countries are markedly different from the spillover effects on developing countries that are plagued by technology absorptive capacity effects due to the operation of threshold effects of underdeveloped human capital resources. The empirics on cross-border FDI flows and the spillover effects that they generate in OECD countries will provide much needed information to design and implement policies to harness the net benefits from cross-border FDI flows in much more productive manner than undertaken hitherto.
    Date: 2012
  42. By: Tim Coelli; Axel Gautier; Sergio Perelman; Roxana Saplacan-Pop
    Abstract: The quality of electricity distribution is being more and more scrutinized by regulatory authorities, with explicit reward and penalty schemes based on quality targets having been introduced in many countries. It is then of prime importance to know the cost of improving the quality for a distribution system operator. In this paper, we focus on one dimension of quality, the continuity of supply, and we estimated the cost of preventing power outages. For that, we make use of the parametric distance function approach, assuming that outages enter in the firm production set as an input, an imperfect substitute for maintenance activities and capital investment. This allows us to identify the sources of technical inefficiency and the underlying trade-off faced by operators between quality and other inputs and costs. For this purpose, we use panel data on 92 electricity distribution units operated by ERDF (Electricite de France - Reseau Distribution) in the 2003–2005 financial years. Assuming a multi-output multi-input translog technology, we estimate that the cost of preventing one interruption varies substantilly among the distribution units from 2.7 € to 15.7 €. Furthermore, as one would expect, marginal quality improvements tend to be more expensive as quality itself improves.
    Date: 2012
  43. By: Vu, Yen Hoang; Meyers, William H.
    Keywords: Financial Economics, Research and Development/Tech Change/Emerging Technologies,
    Date: 2012

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.