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Estimation and decomposition of productivity change when production is not efficient: a paneldata approach

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Author Info
Subal Kumbhakar
M. Denny
M. Fuss

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Abstract

This paper addresses estimation and decomposition of productivity change, which is mostly identified as technical change under constant (unitary) returns to scale (CRS). If the CRS assumption is not made, productivity change is decomposed into technical change and scale effects.Furthermore, if inefficiency exists, it also contributes to productivity change. Here we decompose productivity change into efficiency change, technical change, and scale effects. Three alternative approaches using parametric production, cost, and profit functions, which differ in terms of behavioral assumptions on the producers and data requirements, are considered.

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File URL: http://www.informaworld.com/openurl?genre=article&doi=10.1080/07474930008800481&magic=repec&7C&7C8674ECAB8BB840C6AD35DC6213A474B5
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Publisher Info
Article provided by Taylor and Francis Journals in its journal Econometric Reviews.

Volume (Year): 19 (2000)
Issue (Month): 4 ()
Pages: 312-320
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Handle: RePEc:taf:emetrv:v:19:y:2000:i:4:p:312-320

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Related research
Keywords: total factor productivity; technical change; returns to scale; scale effects; technical inefficiency; allocative inefficiency; production function; cost function; profit function;

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  1. Rae, Allan & Ma, Hengyun & Huang, Jikun & Rozelle, Scott, 2005. "Livestock in China: Commodity specific total factor productivity decomposition using new panel data," 2005 Annual meeting, July 24-27, Providence, RI 19527, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
    Other versions:
  2. Giannis Karagiannis & Vangelis Tzouvelekas, . "Real Money Balances and TFP Growth: Evidence from Developed and Developing Countries," Working Papers 0410, University of Crete, Department of Economics. [Downloadable!]
  3. Subal C. Kumbhakar & Ana Lozano-Vivas, 2004. "Deregulation and Productivity: The Case of Spanish Banks," Economic Working Papers at Centro de Estudios Andaluces E2004/24, Centro de Estudios Andaluces. [Downloadable!]
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  4. Giannis Karagiannis & Vangelis Tzouvelekas, . "Explaining Output Growth of Sheep Farms in Greece: A Parametric Primal Approach," Working Papers 0306, University of Crete, Department of Economics. [Downloadable!]
  5. Kumbhakar, Subal C. & Mavrotas, George, 2005. "Financial Sector Development and Productivity Growth," Working Papers RP2005/68, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  6. Giannis Karagiannis & Vangelis Tzouvelekas, . "Explaining Output Growth With A Heteroscedastic Non-Neutral Production Frontier: The Case Of Sheep Farms In Greece," Working Papers 0409, University of Crete, Department of Economics. [Downloadable!]
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  7. Giannis Karagiannis & Peter Midmore & Vangelis Tzouvelekas, . "Parametric Decomposition Of Output Growth," Working Papers 0204, University of Crete, Department of Economics. [Downloadable!]
  8. Frank H. Fuller & Jikun Huang & Hengyun Ma & Scott Rozelle, 2005. "Rapid Rise of China's Dairy Sector: Factors Behind the Growth in Demand and Supply, The," Center for Agricultural and Rural Development (CARD) Publications 05-wp394, Center for Agricultural and Rural Development (CARD) at Iowa State University. [Downloadable!]
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  9. Karagiannis, Giannis & Midmore, Peter & Tzouvelekas, Vangelis, 2002. "Parametric Decomposition of Output Growth: An Input-Distance Function Approach," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24972, European Association of Agricultural Economists. [Downloadable!]
  10. Massimo Del Gatto & Adriana Di Liberto & C. Petraglia, 2008. "Measuring Productivity," Working Paper CRENoS 200818, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia. [Downloadable!]
  11. Fuller, Frank H. & Huang, Jikun & Ma, Hengyun & Rozelle, Scott, 2005. "Got milk? The rapid rise of China's dairy sector and its future prospects," Staff General Research Papers 12363, Iowa State University, Department of Economics.
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