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on Efficiency and Productivity |
| By: | Lambarraa-Lehnhardt, Fatima; Rosati, Adolfo; Hasnain, Syeda Aleena; Turchetti, Luca |
| Abstract: | This paper investigates the interaction among potential and revealed resilience capacities, technical efficiency, and total factor productivity (TFP) in Italian olive farms using FADN data from 2013-2019. To achieve this objective, we use principal component analysis for evaluating potential resilience indicators and a stochastic frontier model (SFM) to assess farms' competitiveness and evaluate the impact of resilience measures on farms' efficiency and productivity. Results show that Italian olive farms exhibit higher resilience in transformability, followed by robustness and adaptability. Resilience indicators negatively impact technical efficiency. TFP growth is notably influenced by adaptability. Results suggest that balancing competitiveness and resilience is crucial to achieving a sustainable farming system. To face climate change challenges, policies should facilitate transitions to a climate-resilient farming system by incentivizing investments in climate adaptive technologies and designing careful subsidy programs that emphasize the long-term resilience benefits of sustainable farming practices rather than considering immediate efficiency gains. Farmer support through training and collaborative networks is vital to strengthening farms' adaptability and transformability capacities. |
| Keywords: | Production Economics, Productivity Analysis, Research Methods/ Statistical Methods |
| Date: | 2024–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344256 |
| By: | YAHATA, Tomonori; NAKATANI, Tomoaki; NAKASHIMA, Yasuhiro; SENDA, Tetsuji; FUJIE, Takeshi |
| Abstract: | The objective of this article is to analyze total factor productivity (TFP) change and its components of paddy farming that produces multiple outputs under policies controlling the production of food rice in Japan from 2004 to 2014. Using a parametric estimation technique of the Malmquist productivity index with a stochastic input distance function and farm-level panel data, we measure TFP change and decompose it into technical changes, a technical efficiency change, and scale efficiency changes. Results show that the TFP of paddy farming in Japan stagnated through the period, with moderate technological progress offset by deteriorating technical efficiency. The existence of technological progress and technical inefficiency is also confirmed by statistical testing. Technical change has some bias toward changing the output mix. Moreover, scale efficiency is also deteriorating, but all the farms produce under increasing returns to scale technology. Our results suggest that technical efficiency improvement and exploitation of scale economies are essential, as well as keeping an expansion of the technological frontier for Japanese paddy farming to recover its productivity growth. A historical process of Japanese agriculture would provide beneficial insights for other Monsoon Asian countries likely to experience social and economic transitions similar to those in Japan. |
| Keywords: | Productivity Analysis |
| Date: | 2024–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344326 |
| By: | Diro, Samuel; Mohammed, Ali; Getahun, Wudineh; Mamo, Tadele |
| Abstract: | This paper aims to estimate the technical efficiency measures of wheat-producing farmers in Ethiopia using the stochastic frontier panel model. Data from 3482 farm households collected in two rounds of panels (2011 and 2014) was used to estimate the Translog stochastic frontier production function and factors influencing technical efficiency with a one-step maximum likelihood estimator. The production frontier function involves land, seed, inorganic nitrogen, pesticide, oxen power, and labor. The model showed that more than 95% of the total variation in output was a result of factors within the control of the farmer. The result also indicated that land, seed, nitrogen, and pesticide had significant positive effects on wheat output. Most sustainable agricultural practices and plot characteristics included in the production frontier had positive effects on wheat production. The covariates such as gender and education of the household head, credit access, and livestock holding were important in reducing the inefficiency of the wheat producers. However, land size was found to increase the inefficiency of wheat producers. The mean technical efficiency of 2011 and 2014 was 65.3 and 65.4 which was not significant implying limited technological and institutional progress in the wheat sector between the study time. Results revealed that on average wheat output can be increased by 35 percent without additional inputs. Improved access to direct inputs and identified environmental and socioeconomic factors are important in attaining a higher frontier in wheat production in Ethiopia. |
| Keywords: | Production Economics |
| Date: | 2024–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344277 |
| By: | Hahn, Nadine |
| Abstract: | Production functions provide a mapping from the firms' input quantity and productivity to output quantity. This mapping only generates unbiased estimates if input and output quality variation within and between observation units is accounted for. I review and classify state-of-the-art methods to address quality and price variation in production function estimation. Even if inputs and outputs are observed in quantities, unobserved quality variation might bias production function estimates for industries with differentiated products. To account for quality variation, I introduce product characteristics to the estimation procedure and provide an application to the European car industry. |
| Keywords: | Production Functions, Product Differentiation, Quality Control Functions |
| JEL: | D22 D24 C38 B41 L62 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:300673 |
| By: | Yun Liao |
| Abstract: | This study investigates the relationship between bank efficiency and stock market valuation using an unbalanced panel dataset of 42 listed banks in China from 2006 to 2023. We employ a non-radial and non-oriented slack based super-efficiency Data Envelopment Analysis (Super-SBM-UND-VRS based DEA) model, which treats Non-Performing Loans (NPLs) as an undesired output. Our results show that the relationship between super-efficiency and stock market valuation is stronger than that between Return on Asset (ROA) and stock market performance, as measured by Tobin's Q. Notably, the Super-SBM-UND-VRS model yields novel results compared to other efficiency methods, such as the Stochastic Frontier Analysis (SFA) approach and traditional DEA models. Furthermore, our results suggest that bank evaluations benefit from decreased ownership concentration, whereas interest rate liberalization has the opposite effect. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2407.14734 |
| By: | Dam, Adrita; Chatterjee, Soumitra; Kumar, Pramod |
| Abstract: | In India large proportion of population (54.6%) depends on agriculture for their livelihood contributing 17.4% of the country’s Gross Value Added (GVA). The study presents a comprehensive evaluation of the long-term performance of the Rice-Wheat cropping system in the Indo-Gangetic plains of India over five decades (1970-71 to 2019-20). Assessing Total Factor productivity (TFP) across major states, the study reveals a troubling stagnation and decline in TFP for Rice, Wheat and the combined cropping system. Factors such as rising input costs, changing labour dynamics, ground water depletion and state-specific practices significantly impact productivity. Punjab benefits from progressive labour and mechanization, while Haryana faces declining productivity due to groundwater depletion. Uttar Pradesh realizes positive impacts from fertilizer use, while Bihar and west Bengal’s reliance on traditional practices hampers productivity. Socio-economic factors like Net National Income and rural electrification affect TFP, highlighting complex influences on agricultural productivity. The study recommends institutional and structural changes, suggesting privatization through contract farming to enhance efficiency and knowledge among cultivators. Addressing these challenges is crucial for revitalizing agricultural productivity in the region, demanding a multifaceted approach encompassing technological innovation, sustainable practices and inclusive policy interventions. |
| Keywords: | Research and Development/Tech Change/Emerging Technologies |
| Date: | 2024–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344317 |
| By: | Paudel, Gokul P.; Chamberlin, Jordan; Nguyen, Trung Thanh |
| Abstract: | Sustainable intensification (SI) has been promoted within smallholder farming systems to improve agricultural productivity and reduce negative environmental externalities associated with agri-food systems. However, existing studies are concentrated towards the productivity effects of SI and input use efficiency impacts of SI are scant. This study assesses the impact of early sowing of wheat on productivity, nitrogen, phosphorus, potash, and combined fertilizer use efficiency in the eastern Indo-Gangetic Plains. We use the two-stage least squares instrumental variable approach to control the potential endogeneity that arises from both observed and unobserved sources of heterogeneity. We find that early sowing improves all resource use efficiency measures, as well as productivity. However, these impacts are unevenly distributed. Early sowing of wheat on large farms and farms applying doses of fertilizers exceeding the state recommendations are weakly associated with productivity and fertilizer use efficiency. Our findings suggest that while SI has potential to boost wheat productivity and fertilizer use efficiency, significant policy initiatives are required to minimize the over-application of fertilizers and mitigate the negative environmental externalities associated with agri-food systems in India. |
| Keywords: | Environmental Economics and Policy |
| Date: | 2024–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344263 |
| By: | Alulu, Joseph; Muendo, Kavoi; Mbeche, Robert; Mithöfer, Dagmar |
| Abstract: | Rapidly expanding population, increasing urbanization, climate change and declining arable land pose a threat to food security in Sub-Saharan Africa (SSA). Efficiency in agricultural production thus becomes an integral aspect. Seed is a fundamental input, however, seed systems in SSA, more so in underutilized crops such as African Indigenous Vegetables (AIV) remain to be constraining. Using household-level data from 445 AIV producing households in Kenya, this study sought to assess the association between seed innovations and performance, as measured by efficiency and income. The study employs bias-corrected Stochastic Meta-Frontier Approach to estimate technical efficiency (TE), allocative efficiency (AE), economic efficiency (EE) and technology gap ratios (TGRs) while accounting for potential technological heterogeneity as well as self-selection bias. We also implement Inverse Probability Weighted Regression Adjustment (IPWRA) for association between seed innovations and income. Results suggest that adopters of seed innovations outperform their non-adopter counterparts on average in both meta-technical, allocative and economic efficiencies and income. |
| Keywords: | Agricultural and Food Policy, Production Economics, Productivity Analysis |
| Date: | 2024–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344235 |
| By: | Otieno, Wycliffe A.; Nyikal, Rose Adhiambo; Mbogoh, Stephen G.; Rao, Elizaphan J. O. |
| Abstract: | Attempts to manage poultry diseases through clinical treatment are both costly and increase the risk of antimicrobial resistance (AMR). This study was motivated by the need to tackle the dual challenge of diseases leading to AMR and low poultry productivity in Sub-Saharan Africa. It assesses the cost efficiency of farmers who use varying levels of biosecurity measures. We employ a three-step estimation procedure: first, a latent class analysis (LCA) model to describe adoption patterns. Secondly, a stochastic frontier analysis is used to generate cost efficiency scores and inefficiency effects. Lastly, a one-way ANOVA is used to compare cost efficiency by adoption categories. The LCA model reveals three uptake patterns for biosecurity measures with low, moderate, and high adoption behaviors. The average cost efficiency scores are 49.5%, 61.6%, and 68.6%, respectively, for the low, moderate, and high adoption categories. The overall score of 60.4% indicates that poultry farmers in Nyanza are largely cost-efficient. We demonstrate from the observed pattern that there is room to improve cost performance through increased use of biosecurity measures. Years of experience in poultry farming and larger stock sizes reduce farm cost inefficiency. These findings form the basis for the promotion of biosecurity measures. |
| Keywords: | Farm Management, Food Consumption/Nutrition/Food Safety |
| Date: | 2024–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344298 |
| By: | Tho, Le Canh Bich; Umetsu, Chieko |
| Abstract: | The Vietnamese government has developed a strategy for rice production with the goal of reducing export volumes and concentrating on the quality of aromatic and high-quality rice. There are approximately 1 million hectares of aromatic paddy cultivation in the Mekong Delta (MKD) provinces each year, which accounts for about 25% of the total paddy area. Understanding the overall efficiency of aromatic rice in VMKD becomes essential due to the potential development of both domestic and export markets for aromatic rice. Therefore, the purpose of this research is to examine how MKD's farmers produce aromatic rice and determine the factors determining its production efficiency. Primary data were collected through a survey of 247 aromatic rice cultivators. The non-radial data envelopment analysis, a slack-based measure (SBM), was employed to consider the overall efficiency and agrochemical overutilization of each rice farm. In general, aromatic rice production in the MKD achieved an overall efficiency of 63%. In this regard, the RVT variety has the highest SBM score at 0.72, while Jasmine 85 has the lowest SBM score at 0.61. The factors that contribute to household efficiency include obtaining a larger farm size, participating in cooperatives, and practicing eco friendly farming. In addition, aromatic rice producers still use much more than the required amount of inputs for production. The aromatic rice sector should follow climate-smart agricultural practices in order to comply with export standards. This includes a significant reduction in the use of seeds, agrochemicals, and water. |
| Keywords: | Farm Management, Production Economics, Productivity Analysis |
| Date: | 2024–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344329 |
| By: | Mengus, Eric (HEC Paris); Michalski, Tomasz Kamil (HEC Paris) |
| Abstract: | Specialized knowledge-generating jobs comprise close to one fifth of employment and one fourth of the wage bill in French manufacturing firms. They are positioned high in the firm hierarchy, horizontally aside upper-tier managers but are not managerial in nature. This escapes the patterns implied by the hierarchy view of the firm. Conditioning on firm size and shares of management workers, their higher shares in employment at the firm level are correlated with more innovation and intangible capital, greater product complexity, higher revenue and quantity total factor productivity and profitability. This suggests that firms use specialized knowledge workers to generate within-firm knowledge and create firm capabilities. Consistently, we model firms as organizations where efficient production of higher-value added, complex goods requires information acquisition by within-firm knowledge workers to develop capabilities beyond those created by management and hierarchies. |
| Keywords: | firm organization; complexity; productivity; knowledge generation; capabilities. |
| JEL: | D23 D24 D83 J24 L20 M10 M50 |
| Date: | 2023–01–20 |
| URL: | https://d.repec.org/n?u=RePEc:ebg:heccah:1468 |
| By: | Joonkyo Hong; Davide Luparello |
| Abstract: | Exporting plants often undergo significant technology upgrades, becoming more productive than their domestic counterparts. This process, called learning by exporting, is usually modeled as a Hicks-neutral TFP shifter, overlooking factor-biased technical improvements. We develop a dynamic model of production, exporting, and capital investment that incorporates factor-augmenting efficiencies. We find that exporting increases TFP by 9%, skilled labor productivity by 2%, and unskilled labor productivity by 8%. For new exporters, skilled labor productivity rises by 45%, and unskilled labor productivity increases by 75% within four years of entering export markets. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2407.14016 |
| By: | Andres, Raphaela; Niebel, Thomas; Sack, Robin |
| Abstract: | Until today, the question of how digitalisation and, in particular, individual digital technologies affect productivity is still the subject of controversial debate. Using administrative firm-level data provided by the Dutch and the German statistical offices, we investigate the economic importance of data, in particular, the effect of the application of big data analytics (BDA) on labour productivity (LP) at the firm level. We find that a simple binary measure indicating the mere usage of BDA fails to capture the effect of BDA on LP. In contrast, measures of BDA intensity clearly show a positive and statistically significant relationship between BDA and LP, even after controlling for a firm's general digitalisation level. |
| Keywords: | big data analytics, productivity, administrative firm-level data |
| JEL: | L25 O14 O33 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:300678 |
| By: | Falck, Elisabeth; Röhe, Oke; Strobel, Johannes |
| Abstract: | In recent years, there has been a controversial debate on how the rapid diffusion of digital technologies affects labour productivity in advanced economies. Using a multi-sector dynamic general equilibrium model, we show that cumulative labour productivity growth in the United States, Germany and France over the period from 1996 to 2020 would have been about half as high without the efficiency gains from the sectors producing digital goods - despite their relatively small size in terms of gross value added. This is not only because TFP growth in the digital sectors is exceptionally high, but also because other sectors benefit from these efficiency improvements via production linkages. |
| Keywords: | dynamic general equilibrium model, sectoral linkages, production network, digitalisation |
| JEL: | E17 E23 E24 O33 O41 O47 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bubdps:300703 |
| By: | Agnes Norris Keiller; Aureo de Paula; John Van Reenen |
| Abstract: | Standard methods for estimating production functions in the Olley and Pakes (1996) tradition require assumptions on input choices. We introduce a new method that exploits (increasingly available) data on a firm's expectations of its future output and inputs that allows us to obtain consistent production function parameter estimates while relaxing these input demand assumptions. In contrast to dynamic panel methods, our proposed estimator can be implemented on very short panels (including a single cross-section), and Monte Carlo simulations show it outperforms alternative estimators when firms' material input choices are subject to optimization error. Implementing a range of production function estimators on UK data, we find our proposed estimator yields results that are either similar to or more credible than commonly-used alternatives. These differences are larger in industries where material inputs appear harder to optimize. We show that TFP implied by our proposed estimator is more strongly associated with future jobs growth than existing methods, suggesting that failing to adequately account for input endogeneity may underestimate the degree of dynamic reallocation in the economy. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2407.07988 |
| By: | Sakketa, Tekalign Gutu; Nkonde, Chewe; Nkonde, Mwelwa; Herrmann, Raoul |
| Abstract: | Nucleus-outgrower schemes (NOSs) are supposed to be a particularly effective private-sector mechanism to support smallholder farmers and contribute towards mitigating the problematic aspects of pure large- scale agricultural investments. Using two rounds of panel household surveys in Zambia, this study examines the impacts of the NOS of one of the largest foreign land-based investments in agriculture, Amatheon Agri Zambia (AAZ) Limited, on smallholder agricultural technologies adoption, sustainable land management (SLM) and productivity. The findings indicate that participation in the NOS increased the adoption of full- suite conservation agriculture (CA) practices. However, the impact on the adoption of other technologies, specifically the use of improved seed varieties, is less obvious and depends on the type of support provided and scheme design details such as crops promoted. The results also indicate that even if the impact on overall productivity is modest, the programme improves maize productivity during its initial phase compared to the later phase when the programme shifted its focus towards oilseed crops. In sum, the study suggests that NOSs, despite associated risks, have the potential to make substantial contribution to sustainable agricultural practices and to some extent improve productivity of smallholder farmers. |
| Keywords: | Agribusiness, Agricultural and Food Policy |
| Date: | 2024–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344286 |
| By: | KAWAKUBO Takafumi; SUZUKI Takafumi |
| Abstract: | Recently, supply chains have been disrupted worldwide. Using 12-year panel data on buyer-supplier linkages in Japan, we study how the Great East Japan Earthquake in 2011 affected firm performance and their supply chains. We focus on buyer firms located outside the disaster area that were not directly hit by the earthquake and compare those firms with and without suppliers inside the disaster area before 2011. Exploiting difference-in-differences designs, we first find that treated firms, on average, were not differentially hurt. This is confirmed with various firm performance indicators including sales, employment, profit, investment, and productivity measures. Second, we find that treated firms increased the share of suppliers located outside the disaster area, which suggests that they substantially adjusted their supplier relationships. Moreover, we show that treated firms disproportionately accumulated new suppliers closer to their headquarters. The results suggest that it is important for firms to swiftly adjust their supplier network when they face huge, sizeable shocks. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:24067 |