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An international comparison of productivity change in the textile and clothing industry: a bootstrapped Malmquist index approach
Kapelko, M. ; Oude Lansink, A.G.J.M. - \ 2015
Empirical Economics 48 (2015)4. - ISSN 0377-7332 - p. 1499 - 1523.
nonparametric frontier models - data envelopment analysis - technical efficiency - industrialized countries - technological-change - profitability change - detecting outliers - framework - progress - growth
Firms in the textile and clothing industry operate in competitive international markets characterized by the liberalized trade after the removal of multi-fiber agreement quotas in 2005, and have to address rapid changes in consumer preferences and production technology. Hence, improving competitiveness is crucial for firm survival. Competitiveness of the sector often depends on its firms meeting their production potential. This paper analyzes productivity changes in the textile and clothing industry worldwide during the period 1995-2004. A bootstrapped Malmquist approach is used to identify the respective contributions of technical change, technical efficiency change, and scale efficiency change. Moreover, differences in productivity changes across different groups of firms are statistically assessed. Our results show a relatively small overall productivity increase for both textile and clothing firms due to positive technical change, despite declines in technical and scale efficiency. Furthermore, our results indicate that productivity and its components differ for textile firms and clothing firms, for firms in countries that benefited and did not benefit from the quotas' elimination, and for firms in different regions. © 2014 The Author(s).
Land tenure in China: Legal, actual and perceived security
Ma, Xianlei ; Heerink, N. ; Feng, S. ; Shi, X. - \ 2015
Land Use Policy 42 (2015). - ISSN 0264-8377 - p. 293 - 306.
agricultural productivity growth - land rental markets - sub-saharan africa - property-rights - investment incentives - technical efficiency - economic-development - housing improvement - social-security - buenos-aires
This paper examines the magnitudes of legal security, actual security and perceived security of farmland tenure, and the causes of currently prevailing land tenure insecurity in rural China. Two farm household surveys conducted in the northwest of Gansu province in 2010 and in the northeast of Jiangxi province in 2011 are used as case studies. Although recent land tenure reforms have significantly improved legal tenure security, we find that farm households still experience substantial insecurity of actual and perceived land tenure. We argue that social security considerations, ambiguous formulations of laws, and village self-governance rules are three important underlying causes. Actual and perceived land tenure security is lowest in the case study region in Jiangxi province even though the share of off-farm income in rural household incomes is much larger in that region. We explain this finding from investments in land quality improvement made by rural households in the Gansu case study region, the larger per capita land resources in that region, and the limited social security provided by off-farm employment.
Using ex ante output elicitation to model state-contingent technologies
Chambers, R.G. ; Serra, T. ; Stefanou, S.E. - \ 2015
Journal of Productivity Analysis 43 (2015)1. - ISSN 0895-562X - p. 75 - 83.
technical efficiency - cheap talk - cost - distributions - uncertainty - economics
Survey-elicited ex ante outputs are used to develop an empirical representation of an Arrow–Debreu–Savage state-contingent technology in an activity-analysis framework. An empirical test of output-cubicality is developed for that framework. We apply those tools to assess production characteristics of a sample of Catalan farmers specialized in arable crops. Results suggest that imposing nonsubstitutability between ex ante outputs results in no significant loss of information. Even though the technology appears to be output cubical, efficiency measurements based on ex post output observations do not appear to adequately represent the stochastic production environment and apparently yield downward biased technical efficiency measures.
Farm diversity, resource use efficiency and sustainable land management in the western highlands of Kenya
Mutoko, M.C. ; Hein, L.G. ; Shisanya, C.A. - \ 2014
Journal of Rural Studies 36 (2014). - ISSN 0743-0167 - p. 108 - 120.
soil fertility management - sub-saharan africa - technical efficiency - rural poverty - degradation - conservation - agriculture - impact - growth - maize
Sub-Saharan Africa (SSA) faces further population growth in the coming decades and it is essential to increase food production in rural areas. However, development programs to enhance agricultural productivity have achieved mixed results. This study investigates farm household responses to a changing agro-environment in one of the most densely populated rural districts in SSA and examines practical implications for the promotion of sustainable land management (SLM) practices. The specific objective is to analyze farm diversity and resource use efficiency and their implications for promoting SLM in the highlands of Western Kenya. We carried out an elaborate survey of 236 households, and applied multivariate analysis to analyze farm efficiency and livelihood strategies. We found major differences in responses to a changing agro-environment between five farm types in terms of resource endowment, income strategies and farm practices. Across farm types, efficiency was low indicating poor land productivity. Our study shows that there has been a lack of intensification in land use and that households are increasingly depending on off-farm income. Our findings have a number of implications to programs aiming to promote sustainable land management in SSA. We propose that successful implementation of such programs requires targeting areas highly reliant on agriculture and within these areas focus on households mostly dependent on farming to sustain their welfare. (C) 2014 Elsevier Ltd. All rights reserved.
Assessing dynamic efficiency of the Spanish construction sector pre- and post-financial crisis
Kapelko, M. ; Stefanou, S.E. ; Oude Lansink, A.G.J.M. - \ 2014
European Journal of Operational Research 237 (2014)1. - ISSN 0377-2217 - p. 349 - 357.
data envelopment analysis - technical efficiency - electric utilities - industry - dea - model
This paper undertakes the full decomposition of dynamic cost inefficiency into technical, scale and allocative inefficiency based on the dynamic directional distance function. The empirical application estimates dynamic inefficiency in the Spanish construction industry before and during the current financial crisis over the period 2001–2009. Static inefficiency measures are biased in a context of a significant economic crisis with large investments and disinvestments as they do not account for costs in the adjustment of quasi-fixed factors. Allocative inefficiency is smaller, while technical inefficiency is larger when using the dynamic compared to the static framework. Results further indicate that overall dynamic cost inefficiency is very high with technical inefficiency being the largest component, followed by allocative and scale inefficiency. Moreover, overall dynamic cost inefficiency is significantly larger before the beginning of the financial crisis than during the financial crisis. Larger firms are less technically and scale inefficient than smaller firms on average, but have more problems in choosing the mix of inputs that minimizes their long-term costs. Firms that went bankrupt, on average, have a higher overall dynamic cost inefficiency and scale inefficiency than continuing firms.
Pesticide use, environmental spillovers and efficiency: A nonparametric risk-adjusted efficiency approach applied to Dutch arable farming
Skevas, T. ; Stefanou, S.E. ; Oude Lansink, A.G.J.M. - \ 2014
European Journal of Operational Research 237 (2014)2. - ISSN 0377-2217 - p. 658 - 664.
nonparametric production analysis - mean-variance approach - undesirable outputs - damage control - production uncertainty - technical efficiency - weak disposability - genetic diversity - joint estimation - duality models
Pesticides are widely used by crop producers in developed countries to combat risk associated with pests and diseases. However, their indiscriminate use can lead to various environmental spillovers that may alter the agricultural production environment thus contributing to production risk. This study utilises a data envelopment analysis (DEA) approach to measure performance of arable farms, incorporating pesticides’ environmental spillovers and output variance as undesirable outputs in the efficiency analysis and taking explicitly into account the effect of pesticides and other inputs on production risk. The application focuses on panel data from Dutch arable farms over the period 2003–2007. A moment approach is used to compute output variance, providing empirical representations of the risk-increasing or -decreasing nature of the used inputs. Finally, shadow values of risk-adjusted inputs are computed. We find that pesticides are overused in Dutch arable farming and there is a considerable evidence of the need for decreasing pesticides’ environmental spillovers.
Estimating farmers’ productive and marketing inefficiency: an application to vegetable producers in Benin
Singbo, A.G. ; Oude Lansink, A.G.J.M. ; Emvalomatis, G. - \ 2014
Journal of Productivity Analysis 42 (2014)2. - ISSN 0895-562X - p. 157 - 169.
technical efficiency - distance functions - farming system - diversification - management - growth - impact
This paper estimates the technical and marketing inefficiency of a sample of urban vegetable producers in Benin. Marketing inefficiency is defined as the failure of farmers to achieve better marketing output and is reflected in lower output price indices. The study proposes a Russell-type measure of inefficiency using a directional distance function that accounts simultaneously for the expansion of outputs and price indices and the contraction of variable inputs. A truncated bootstrap regression is used in the second stage to consistently analyze factors that underlie differences in inefficiency. The first-stage results suggest that vegetable producers are more inefficient with respect to marketing than production. The second-stage results indicate that technical inefficiency is affected by the production environment and private extension services. Marketing inefficiency is affected by the type of marketing arrangements.
Technological Development and Fisheries Management
Eigaard, O.R. ; Marchal, P. ; Gislason, H. ; Rijnsdorp, A.D. - \ 2014
Reviews in Fisheries Science & Aquaculture 22 (2014)2. - ISSN 2330-8249 - p. 156 - 174.
individual transferable quotas - time-varying catchability - fishing power increases - trawl fishery - unit-effort - technical efficiency - demersal fisheries - mixed fisheries - fleet dynamics - north-sea
Many marine fish stocks are overexploited and considerable overcapacity exists in fishing fleets worldwide. One of the reasons for the imbalance between resource availability and fishing capacity is technological development, which continuously increases the efficiency of the vessels—a mechanism referred to as “technological creep.” We review how the introduction of new and more efficient electronic equipment, gear design, engines, deck equipment, and catch-handling procedures influences the capture efficiency (catchability) of commercial fishing vessels. On average, we estimate that catchability increases by 3.2% per year due to technological developments, an increase often ignored in fisheries management. The documentation and quantification of technological creep improves the basis for successfully integrating the effects of technological development (and catchability changes) in fisheries management regulations and policies. Ways of counteracting the undesired effects of technological creep are discussed as are the potential management benefits from improved fishing technology. Specific suggestions are given on the selection, application, and tuning of fisheries management tools that can be used to improve the balance between harvesting capacity and resource availability.
Reducing pesticide use and pesticide impact by productivity growth: the case of dutch arable farming
Skevas, T. ; Oude Lansink, A.G.J.M. - \ 2014
Journal of Agricultural Economics 65 (2014)1. - ISSN 0021-857X - p. 191 - 211.
dairy farms - efficiency measurement - technical efficiency - panel-data - subsidies - dea - agriculture - netherlands - spillovers - countries
This paper employs a dynamic Data Envelopment Analysis (DEA) model to measure the composition of productivity growth of pesticides and the environmental impacts of pesticides. The application focuses on panel data of Dutch arable farms over the period 2003–07. A bootstrap regression model is used to explain farmers' performance, providing empirical evidence of the impact of producer-specific characteristics and environmental factors. The results show that Dutch arable farms have substantial inefficiency in the use of pesticides and high pesticide environmental inefficiency, and appear rather unconcerned about the environmental impacts of their current pesticide use decisions on next period's production environment.
Measuring productivity growth under factor non-substitution: An application to US steam-electric power generation utilities
Genius, M. ; Stefanou, S.E. ; Tzouvelekas, V. - \ 2012
European Journal of Operational Research 220 (2012)3. - ISSN 0377-2217 - p. 844 - 852.
technical efficiency - united-states - model selection - industry - scale - inefficiency - economies - frontier - plants - cost
A theoretical framework is developed for decomposing partial factor productivity and measuring technical inefficiency when the underlying technology is characterized by factor non-substitution. With Farrell’s (1957) radial index of technical inefficiency being inappropriate in this case, Russell non-radial indices are adapted to measure technical inefficiency in a Leontief-type model. A system of factor demand equations with a regime specific technical inefficiency term is proposed and estimated allowing for dependence across inputs using a copula approach. Then the paper presents a complete decomposition of partial factor productivity changes using a dataset of US steam-power electric generation utilities.
Productivity Growth in German Dairy Farming using a Flexible Modelling Approach
Emvalomatis, G. - \ 2012
Journal of Agricultural Economics 63 (2012)1. - ISSN 0021-857X - p. 83 - 101.
stochastic frontier models - technical efficiency - agricultural productivity - parametric decomposition - distance functions - output growth - bayes factors - panel-data - coefficients - perspective
A random-coefficients specification of an output distance function is used to measure and decompose productivity growth in German dairy farming. This specification can accommodate heterogeneity with respect to the technology employed by dairy farms, allowing for specialised and non-specialised farms to be included in the analysis. The proposed modelling approach is favoured by the data when compared with the conventional translog specification of distance functions. The average total factor productivity growth rate for German dairy farms is estimated at 1.1%, with the technical progress component contributing most of this growth.
Outreach and Efficiency of Microfinance Institutions
Hermes, N. ; Lensink, B.W. ; Meesters, A. - \ 2011
World Development 39 (2011)6. - ISSN 0305-750X - p. 938 - 948.
technical efficiency - bank efficiency - cost efficiency - sustainability
This paper uses stochastic frontier analysis to examine whether there is a trade-off between outreach to the poor and efficiency of microfinance institutions (MFIs). We find convincing evidence that outreach is negatively related to efficiency of MFIs. More specifically, we find that MFIs that have a lower average loan balance (a measure of the depth of outreach) are also less efficient. Moreover, we find evidence showing that MFIs that have more women borrowers as clients (again a measure of the depth of outreach) are less efficient. These results remain robustly significant after having added a number of control variables.
The Impact of Direct Income Transfers of CAP on Greek Olive Farms' Performance: Using a Non-Monotonic Inefficiency Effects Model
Zhu, X. ; Karagiannis, G. ; Oude Lansink, A.G.J.M. - \ 2011
Journal of Agricultural Economics 62 (2011)3. - ISSN 0021-857X - p. 630 - 638.
technical efficiency - subsidies
We analyse the impacts of direct income transfers on the technical efficiency of Greek olive farms. We use a production frontier function and a non-monotonic inefficiency effects model, which incorporates the influences of exogenous variables (subsidies, farm characteristics, etc.) on technical efficiency. The model is applied to 1995–2004 FADN data. The results show that direct transfers of the CAP had a negative and monotonic effect on technical efficiency, whereas the degree of specialisation had a non-monotonic effect on technical efficiency
Simulation of efficiency impact of drainage water reuse: case of small-scale vegetable growers in North West Province, South Africa
Speelman, S. ; Haese, M.F.C. D'; Haese, L. D' - \ 2011
Agrekon 50 (2011)1. - ISSN 0303-1853 - p. 89 - 101.
data envelopment analysis - productive efficiency - technical efficiency - irrigation - benchmarking - victoria - schemes - farms - spain - dea
This paper focuses on estimating the effect of drainage water reuse on the technical efficiency of small-scale vegetable growers in South Africa applying a data envelopment analysis (DEA). In the semi-arid North West Province of South Africa water scarcity and the soon to be implemented water charges have urged farmers in small-scale irrigation schemes to evaluate the efficiency of their water use. Data on 60 farmers were used to estimate the level of technical efficiency and the effect that drainage water re-use could have on efficiency levels. This effect of water reuse was simulated by a 5, 10, 15 and 20 per cent reduction in water use at farm level. A Malmquist productivity index was calculated to evaluate the effect of these reductions. The main finding was that under current farming conditions many farmers operated at suboptimal levels of technical efficiency. While a reduction in water use evidently increased factor productivity for most farms, the effect clearly varied strongly between farms. This confirms the need to take a systems approach for this type of evaluations.
The yield gap of global grain production: A spatial analysis
Neumann, K. ; Verburg, P.H. ; Stehfest, E. ; Müller, C. - \ 2010
Agricultural Systems 103 (2010)5. - ISSN 0308-521X - p. 316 - 326.
frontier production-functions - land-use - climate-change - agricultural intensification - technical efficiency - crop production - food security - china - wheat - determinants
Global grain production has increased dramatically during the past 50 years, mainly as a consequence of intensified land management and introduction of new technologies. For the future, a strong increase in grain demand is expected, which may be fulfilled by further agricultural intensification rather than expansion of agricultural area. Little is known, however, about the global potential for intensification and its constraints. In the presented study, we analyze to what extent the available spatially explicit global biophysical and land management-related data are able to explain the yield gap of global grain production. We combined an econometric approach with spatial analysis to explore the maximum attainable yield, yield gap, and efficiencies of wheat, maize, and rice production. Results show that the actual grain yield in some regions is already approximating its maximum possible yields while other regions show large yield gaps and therefore tentative larger potential for intensification. Differences in grain production efficiencies are significantly correlated with irrigation, accessibility, market influence, agricultural labor, and slope. Results of regional analysis show, however, that the individual contribution of these factors to explaining production efficiencies strongly varies between world-regions.
Analysing Production Technology and Risk in Organic and Conventional Dutch Arable Farming using Panel Data
Gardebroek, C. ; Chavez Clemente, M.D. ; Oude Lansink, A.G.J.M. - \ 2010
Journal of Agricultural Economics 61 (2010)1. - ISSN 0021-857X - p. 60 - 75.
technical efficiency - systems - netherlands
Abstract This paper compares the production technology and production risk of organic and conventional arable farms in the Netherlands. Just–Pope production functions that explicitly account for output variability are estimated using panel data of Dutch organic and conventional farms. Prior investigation of the data indicates that within variation of output is significantly higher for organic farms, indicating that organic farms face more output variation than conventional farms. The estimation results indicate that in both types of farms, unobserved farm-specific factors like management skills and soil quality are important in explaining output variability and production risk. The results further indicate that land has the highest elasticity of production for both farm types. Labour and other variable inputs have significant production elasticities in the case of conventional farms and other variable inputs in the case of organic farms. Manure and fertilisers are risk-increasing inputs on organic farms and risk-reducing inputs on conventional farms. Other variable inputs and labour are risk increasing on both farm types; capital and land are risk-reducing inputs. Keywords: Organic and conventional production; panel data; production risk.
Efficiency in milk production on Reunion Island: Dealing with land scarcity
Haese, M.F.C. D'; Speelman, S. ; Alary, V. ; Tillard, E. ; Haese, L. D' - \ 2009
Journal of Dairy Science 92 (2009)8. - ISSN 0022-0302 - p. 3676 - 3683.
data envelopment analysis - dairy farming systems - technical efficiency - nonparametric approach - bangladesh - frontier
This paper aims to analyze efficiency on dairy farms in Reunion Island, a French overseas district located in the Indian Ocean. On this island, dairy farming is promoted with financial and technical support from the European Union, with the French and local governments aiming at reducing dependency on imports of milk powder and dairy products and creating employment. A critical factor for increasing the local milk production is the limited availability of arable land because of the small size and the volcanic nature of the island. In this paper, we study the efficiency levels of dairy production on 34 farms by using a data envelopment analysis approach. The average technical efficiency score of farms, assuming constant returns to scale, was 0.927, with 19 out of 34 farms not being efficient. The technical efficiency with a variable returns to scale specification was 0.951. The efficiency with which farmers used their land (subvector efficiencies) was estimated in a second model. The average subvector efficiencies calculated with constant returns to scale and variable returns to scale models were lower than the technical efficiencies. The farmers on the efficiency frontier had a relatively higher milk production, milk production per cow, and land surface than those who were less efficient. A policy promoting better use of the land on inefficient farms should increase the milk production-to-land ratio. Possible on-farm strategies are improved feeding systems, farms having their own heifer breeding, and improved genetics.
The impact of the 1999 CAP reforms on the efficiency of the COP sector in Spain
Lambarra, F. ; Stefanou, S.E. ; Serra, T. ; Gil, J.M. - \ 2009
Agricultural Economics 40 (2009)3. - ISSN 0169-5150 - p. 355 - 364.
technical efficiency - farms - price
The cereal, oilseeds, and protein crop sector (COP) occupies a prominent position within the European Union's agricultural sector. Within Spain, the COP sector accounts for almost a third of total Agricultural Guidance and Guarantee Fund expenses, and half of the utilized agricultural area (UAA). The COP sector is not only relevant because of its physical and economic magnitude, but also because of the political attention it receives. The Common Agricultural Policy (CAP) reforms that occurred during the 1990s paid special attention to this sector. This article aims to determine the impacts of Agenda 2000 on a sample of Spanish COP farmers' production decisions by using an output-oriented stochastic distance function. The distance function allows for an assessment of the reform-motivated changes on total output, input used, input composition, and crop mix. It also permits an assessment of the impacts of the reform on farms' technical efficiency. Results show that the reform has shifted the production frontier inward and changed output composition in favor of voluntary set-aside land. With respect to input composition, Agenda 2000 induced a decrease in land, fertilizers, pesticides, and other inputs in favor of labor. In addition, Agenda 2000 has had a negative impact on technical efficiency
Measuring excess capital capacity in agricultural production
Zhengfei, G. ; Kumbhakar, S.C. ; Myers, R.J. ; Oude Lansink, A.G.J.M. - \ 2009
American Journal of Agricultural Economics 91 (2009)3. - ISSN 0002-9092 - p. 765 - 776.
stochastic frontier model - panel-data - technical efficiency - labor-use - estimators - investment - adjustment - specification - heterogeneity - uncertainty
We introduce the concept "excess capital capacity" and employ a stochastic input requirement frontier to measure excess capital capacity in agricultural production. We also propose a two-step estimation method that allows endogenous regressors in stochastic frontier models. The first step uses generalized method of moments to get consistent estimates of the frontier parameters in the presence of endogenous regressors. The second step uses maximum likelihood to measure excess capital capacity and evaluate the factors that influence it. The empirical application to Dutch cash crop farms found varying degrees of excess capital capacity. The policy implications of excess capital capacity are discussed
Economic impacts of climatic variability and subsidies on European agriculture and observed adaptation strategies
Reidsma, P. ; Oude Lansink, A.G.J.M. ; Ewert, F. - \ 2009
Mitigation and Adaptation Strategies for Global Change 14 (2009)1. - ISSN 1381-2386 - p. 35 - 59.
land-use change - adaptive capacity - technical efficiency - ricardian analysis - future scenarios - vulnerability - policy - consequences - productivity - performance
In order to assess agricultural adaptation to climate impacts, new methodologies are needed. The translog distance function allows assessing interactions between different factors, and hence the influence of management on climate impacts. The Farm Accountancy Data Network provides extensive data on farm characteristics of farms throughout the EU15 (i.e. the 15 member states of the European Union before the extension in 2004). These data on farm inputs and outputs from 1990¿2003 are coupled with climate data. As climate change is not the only change affecting European agriculture, we also include effects of subsidies and other changes on inputs and outputs of farms throughout Europe. We distinguish several regions and empirically assess (1) climate impacts on farm inputs and outputs in different regions and (2) interactions between inputs and other factors that contribute to the adaptation to these impacts. Changes in production can partly be related to climatic variability and change, but also subsidies and other developments (e.g. technology, markets) are important. Results show that impacts differ per region, and that `actual impacts¿ cannot be explicitly separated into `potential impacts¿ and `adaptive capacity¿ as often proposed for vulnerability assessment. Farmers adapt their practices to prevailing conditions and continuously adapt to changing conditions. Therefore, `potential impacts¿ will not be observed in practice, leaving it as a mainly theoretical concept. Factors that contribute to the adaptation also differ per region. In some regions more fertilizers or more irrigation can mitigate impacts, while in other regions this amplifies impacts. To project impacts of future climate change on agriculture, current farm management strategies and their influence on current production should be considered. This clearly asks for improved integration of biophysical and economic models.