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Spatial nonstationarity in the stochastic frontier model: An application to the Italian wine industry

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  • Vidoli, Francesco
  • Cardillo, Concetta
  • Fusco, Elisa
  • Canello, Jacopo

Abstract

This research estimates the efficiency of a representative sample of Italian wine producers from the Italian FADN survey following a recent spatial stochastic frontier framework that allows to isolate the spatial dependence among units and to evaluate the role of intangible local factors in influencing the economic performance of firms. The empirical exercise shows that the specific territorial patterns in the data cannot be merely explained using a standard set of contextual factors. This intangible component can be interpreted as the role of the local business climate: in most localities, the presence of an embedded community stimulates a process of local learning that generates the diffusion of tacit knowledge through continuous interaction among the local actors. This effect is found to be different across firm size, with a larger impact on small firms.

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  • Vidoli, Francesco & Cardillo, Concetta & Fusco, Elisa & Canello, Jacopo, 2016. "Spatial nonstationarity in the stochastic frontier model: An application to the Italian wine industry," Regional Science and Urban Economics, Elsevier, vol. 61(C), pages 153-164.
    • Handle: RePEc:eee:regeco:v:61:y:2016:i:c:p:153-164
    DOI: 10.1016/j.regsciurbeco.2016.10.003
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    Cited by:

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    2. Orea, Luis & Álvarez, Inmaculada C., 2019. "Spatial Production Economics," Efficiency Series Papers 2019/06, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
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    6. Kassoum Ayouba, 2023. "Spatial dependence in production frontier models," Journal of Productivity Analysis, Springer, vol. 60(1), pages 21-36, August.
    7. Christoph Pross & Christoph Strumann & Alexander Geissler & Helmut Herwartz & Nadja Klein, 2018. "Quality and resource efficiency in hospital service provision: A geoadditive stochastic frontier analysis of stroke quality of care in Germany," PLOS ONE, Public Library of Science, vol. 13(9), pages 1-30, September.
    8. Bergantino, Angela Stefania & Intini, Mario & Volta, Nicola, 2020. "Spatial competition and efficiency: an investigation in the airport sector," The Warwick Economics Research Paper Series (TWERPS) 1287, University of Warwick, Department of Economics.
    9. Samuel Faria & Sofia Gouveia & Alexandre Guedes & João Rebelo, 2021. "Transient and Persistent Efficiency and Spatial Spillovers: Evidence from the Portuguese Wine Industry," Economies, MDPI, vol. 9(3), pages 1-20, August.
    10. A. G. Billé & C. Salvioni & R. Benedetti, 2018. "Modelling spatial regimes in farms technologies," Journal of Productivity Analysis, Springer, vol. 49(2), pages 173-185, June.
    11. Jacopo Canello & Francesco Vidoli, 2020. "Investigating space‐time patterns of regional industrial resilience through a micro‐level approach: An application to the Italian wine industry," Journal of Regional Science, Wiley Blackwell, vol. 60(4), pages 653-676, September.
    12. Fei Jin & Lung-fei Lee, 2020. "Asymptotic properties of a spatial autoregressive stochastic frontier model," Journal of Spatial Econometrics, Springer, vol. 1(1), pages 1-40, December.
    13. Laureti, Tiziana & Benedetti, Ilaria & Branca, Giacomo, 2021. "Water use efficiency and public goods conservation: A spatial stochastic frontier model applied to irrigation in Southern Italy," Socio-Economic Planning Sciences, Elsevier, vol. 73(C).
    14. Fusco, Elisa & Allegrini, Veronica, 2020. "The role of spatial interdependence in local government cost efficiency: An application to waste Italian sector," Socio-Economic Planning Sciences, Elsevier, vol. 69(C).
    15. Fusco, Elisa & Vidoli, Francesco & Rogge, Nicky, 2020. "Spatial directional robust Benefit of the Doubt approach in presence of undesirable output: An application to Italian waste sector," Omega, Elsevier, vol. 94(C).
    16. Fusco, Elisa & Vidoli, Francesco & Sahoo, Biresh K., 2018. "Spatial heterogeneity in composite indicator: A methodological proposal," Omega, Elsevier, vol. 77(C), pages 1-14.
    17. Cavalieri, Marina & Di Caro, Paolo & Guccio, Calogero & Lisi, Domenico, 2020. "Does neighbours' grass matter? Testing spatial dependent heterogeneity in technical efficiency of Italian hospitals," Social Science & Medicine, Elsevier, vol. 265(C).
    18. Theodoros Skevas & Jasper Grashuis, 2020. "Technical efficiency and spatial spillovers: Evidence from grain marketing cooperatives in the US Midwest," Agribusiness, John Wiley & Sons, Ltd., vol. 36(1), pages 111-126, January.
    19. Yiorgos Gadanakis & Francisco José Areal, 2020. "Accounting for rainfall and the length of growing season in technical efficiency analysis," Operational Research, Springer, vol. 20(4), pages 2583-2608, December.

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    More about this item

    Keywords

    Spatial nonstationarity; Spatial stochastic frontier model; Wine; Efficiency;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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