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Comparative Efficiency of Family and Corporate Farms: Does Family Labour Matter?

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  • Philip Kostov
  • Sophia Davidova
  • Alastair Bailey

Abstract

We examine the comparative efficiency of family relative to corporate farms, using FADN data for the Czech Republic, Hungary, Romania and Spain. We estimate a non‐parametric non‐separable farm production function, and derive efficiency scores for both family and corporate farms. We decompose efficiency into two distinct sources – organisational differences and management capabilities. We find evidence for organisational efficiency gains from family farming, relative to corporate farming, and these appear to increase with family involvement. However, with regard to management capabilities, family farms do not compare so favourably. Furthermore, family involvement does not seem to have any systematic effect on the efficiency derived from management capabilities. Our findings suggest that further investigation of the way family farms employ and build management capabilities is needed to substantiate any ‘superiority’ claims.

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  • Philip Kostov & Sophia Davidova & Alastair Bailey, 2019. "Comparative Efficiency of Family and Corporate Farms: Does Family Labour Matter?," Journal of Agricultural Economics, Wiley Blackwell, vol. 70(1), pages 101-115, February.
    • Handle: RePEc:bla:jageco:v:70:y:2019:i:1:p:101-115
    DOI: 10.1111/1477-9552.12280
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    Cited by:

    1. S. C. West & A. W. Mugera & R. S. Kingwell, 2022. "The choice of efficiency benchmarking metric in evaluating firm productivity and viability," Journal of Productivity Analysis, Springer, vol. 57(2), pages 193-211, April.
    2. Wuepper, David & Wimmer, Stefan & Sauer, Johannes, 2020. "Is small family farming more environmentally sustainable? Evidence from a spatial regression discontinuity design in Germany," Land Use Policy, Elsevier, vol. 90(C).
    3. Garcia, Luis & Laepple, Doris & Dillon, Emma & Thorne, Fiona, 2020. "The role of hired labor in transient and persistent technical efficiency on Irish dairy farms," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304395, Agricultural and Applied Economics Association.
    4. Aliaa Dirani & Gumataw Kifle Abebe & Rachel A. Bahn & Giuliano Martiniello & Isam Bashour, 2021. "Exploring climate change adaptation practices and household food security in the Middle Eastern context: a case of small family farms in Central Bekaa, Lebanon," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 13(4), pages 1029-1047, August.
    5. Adele Coppola & Alfonso Scardera & Mario Amato & Fabio Verneau, 2020. "Income Levels and Farm Economic Viability in Italian Farms: An Analysis of FADN Data," Sustainability, MDPI, vol. 12(12), pages 1-18, June.
    6. Lingjuan Cheng & Yilin Cui & Kaifeng Duan & Wei Zou, 2022. "The Influence of New Agricultural Business Entities on Farmers’ Employment Decision," Land, MDPI, vol. 11(1), pages 1-15, January.

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