|Title||Investment age and dynamic productivity growth in the Spanish food processing industry|
|Author(s)||Kapelko, Magda; Oude Lansink, A.G.J.M.; Stefanou, S.E.|
|Source||American Journal of Agricultural Economics 98 (2016)3. - ISSN 0002-9092 - p. 946 - 961.|
|Publication type||Refereed Article in a scientific journal|
|Keyword(s)||Data Envelopment Analysis, dynamic Luenberger productivity growth indicator, investment age, food industry|
|Abstract||This article analyzes the relation between investment age, measured as the number of years since investment spike, and dynamic productivity growth and its components, which include dynamic technical change, dynamic inefficiency change, and dynamic scale inefficiency change. The empirical application focuses on firm-level data for the Spanish food processing industry covering
the period from 1996 to 2011. This investigation of the impact of firms’ investment decisions on productivity growth employs a dynamic production framework and analyzes the impact of these decisions on the components of dynamic productivity growth. Our findings show that dynamic productivity growth is negatively affected by investment spikes in both the meat processing and oils and fats industries, and that dynamic inefficiency change initially falls just after the infusion of large investment for oils and fats firms, but then grows as the firms acquire experience with this investment. We further find that investment spikes lead to improvements in dynamic technical change and worsening in dynamic technical inefficiency change in the meat processing industry, while dynamic scale inefficiency change was negatively impacted in both industries.