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Evaluating dynamic productivity change of US farm supply cooperatives

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  • Theodoros Skevas
  • Jasper Grashuis

Abstract

This article estimates dynamic productivity change and its components (i.e., technical inefficiency change, scale inefficiency change, and technical change) for a sample of ~700 US farm supply cooperatives over the 2005–2017 period. Estimation is undertaken using a directional distance function that accounts for the presence of adjustment costs associated with investments in quasi‐fixed factors of production. A bootstrap regression is then used to determine the factors affecting dynamic productivity change and its components. Results show that the sample cooperatives experienced a modest decline in productivity over the study period, on average. The analysis of productivity change decompositions suggests that productivity decline is mainly due to the negative contribution of technical inefficiency change. Results further reveal that ignoring adjustment costs when modeling cooperatives' performance leads to distortions in estimates of productivity and its components. The regression analysis results show that years of operation and a higher share of energy products in supply turnover are positively related to productivity change, technical inefficiency change, and scale inefficiency change. [EconLit Citations: Q12, D22, C61].

Suggested Citation

  • Theodoros Skevas & Jasper Grashuis, 2023. "Evaluating dynamic productivity change of US farm supply cooperatives," Agribusiness, John Wiley & Sons, Ltd., vol. 39(4), pages 1238-1253, October.
    • Handle: RePEc:wly:agribz:v:39:y:2023:i:4:p:1238-1253
    DOI: 10.1002/agr.21812
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