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Dynamic stochastic analysis of the farm subsidy-efficiency link: evidence from France

Author

Listed:
  • Jean Joseph Minviel

    (SMART, INRA
    IHAP, Université de Toulouse, INRA, ENVT)

  • Timo Sipiläinen

    (University of Helsinki, Department of Economics and Management)

Abstract

The existing literature on the subsidy-efficiency nexus is almost exclusively based on static modelling and thus ignores the inter-temporal nature of production decisions. The present paper contributes to this literature by developing a dynamic stochastic frontier model, which is then estimated using a sample of French farms over the period 1992–2011. For comparison purposes, the static counterpart of the dynamic model is also estimated. The results indicate that, in the dynamic case as well as in the static one, public subsidies are negatively associated with farm technical efficiency. Nevertheless, these linkages are found to be weak, and they are much weaker when dynamic aspects are taken into account.

Suggested Citation

  • Jean Joseph Minviel & Timo Sipiläinen, 2018. "Dynamic stochastic analysis of the farm subsidy-efficiency link: evidence from France," Journal of Productivity Analysis, Springer, vol. 50(1), pages 41-54, October.
    • Handle: RePEc:kap:jproda:v:50:y:2018:i:1:d:10.1007_s11123-018-0533-y
    DOI: 10.1007/s11123-018-0533-y
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    More about this item

    Keywords

    Dynamic efficiency; Hyperbolic distance function; Subsidies; Farms;
    All these keywords.

    JEL classification:

    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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