IDEAS home Printed from https://ideas.repec.org/p/ags/gewi07/7618.html
   My bibliography  Save this paper

Organic Farming In Denmark-Productivity, Technical Change And Market Exit

Author

Listed:
  • Sauer, Johannes
  • Park, Timothy A.
  • Graversen, Jesper T.

Abstract

This paper attempts to quantitatively measure the change in the productivity of Danish organic farming in recent years. Based on a translog production frontier framework the technical and scale efficiency on farm level is analysed by following a time trends as well as a general index model specification. We further try to analyse the significance of subsidies for promoting long term growth in organic production by estimating a bootstrapped bivariate probit model with respect to factors influencing the probability of organic market exit. The results revealed significant differencies in the organic farms' technical efficiencies, no significant total factor productivity growth and even a slightly negative rate of technical change in the period investigated. We found evidence for a positive relationship between subsidy payments and an increase in farm efficiency, technology improvements and a decreasing probability of organic market exit which was also confirmed for off farm income.

Suggested Citation

  • Sauer, Johannes & Park, Timothy A. & Graversen, Jesper T., 2007. "Organic Farming In Denmark-Productivity, Technical Change And Market Exit," 47th Annual Conference, Weihenstephan, Germany, September 26-28, 2007 7618, German Association of Agricultural Economists (GEWISOLA).
    • Handle: RePEc:ags:gewi07:7618
    DOI: 10.22004/ag.econ.7618
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/7618/files/cp07sa06.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.7618?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Subal C. Kumbhakar, 2004. "Productivity and technical change: Measurement and testing," Empirical Economics, Springer, vol. 29(1), pages 185-191, January.
    2. David Audretsch & Patrick Houweling & A. Thurik, 2000. "Firm Survival in the Netherlands," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 16(1), pages 1-11, February.
    3. William A. Barnett & Jane Binner & W. Erwin Diewert, 2005. "Functional Structure and Approximation in Econometrics (book front matter)," Econometrics 0511006, University Library of Munich, Germany.
    4. Baltagi, Badi H. & Rich, Daniel P., 2005. "Skill-biased technical change in US manufacturing: a general index approach," Journal of Econometrics, Elsevier, vol. 126(2), pages 549-570, June.
    5. Madau, Fabio A., 2005. "Technical Efficiency in Organic Farming: An Application on Italian Cereal Farms Using a Parametric Approach," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24545, European Association of Agricultural Economists.
    6. Donghyun Oh & Almas Heshmati & Hans Lööf, 2012. "Technical change and total factor productivity growth for Swedish manufacturing and service industries," Applied Economics, Taylor & Francis Journals, vol. 44(18), pages 2373-2391, June.
    7. Wheelock, David C & Wilson, Paul W, 1995. "Explaining Bank Failures: Deposit Insurance, Regulation, and Efficiency," The Review of Economics and Statistics, MIT Press, vol. 77(4), pages 689-700, November.
    8. Pierre Rainelli & Dominique Vermersch & Organisation de Coopération Et de Développement Économiques (ocde), 2000. "Comparing the profitability of organic and conventional farming : the impact of support on arable farming in France," Working Papers hal-01593999, HAL.
    9. Agustí Segarra & Maria Callejón, 2002. "New Firms' Survival and Market Turbulence: New Evidence from Spain," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 20(1), pages 1-14, February.
    10. Sipilainen, Timo & Oude Lansink, Alfons G.J.M., 2005. "Learning in Organic Farming - An Application on Finnish Dairy Farms," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24493, European Association of Agricultural Economists.
    11. Efthymios Tsionas & Theodore Papadogonas, 2006. "Firm exit and technical inefficiency," Empirical Economics, Springer, vol. 31(2), pages 535-548, June.
    12. Greene, W.H., 1996. "Marginal Effects in the Bivariate Probit Model," Working Papers 96-11, New York University, Leonard N. Stern School of Business, Department of Economics.
    13. Tzouvelekas, Vangelis & Pantzios, Christos J. & Fotopoulos, Christos, 2001. "Economic Efficiency in Organic Farming: Evidence from Cotton Farms in Viotia, Greece," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 33(1), pages 35-48, April.
    14. David B. Audretsch, 1995. "Innovation and Industry Evolution," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011468, December.
    15. Kumbhakar, Subal C & Ghosh, Soumendra & McGuckin, J Thomas, 1991. "A Generalized Production Frontier Approach for Estimating Determinants of Inefficiency in U.S. Dairy Farms," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(3), pages 279-286, July.
    16. Inha Oh & Jeong-Dong Lee & Almas Heshmati, 2008. "Total Factor Productivity in Korean Manufacturing Industries," Global Economic Review, Taylor & Francis Journals, vol. 37(1), pages 23-50.
    17. Dunne, T. & Roberts, M.J., 1989. "Variation In Producer Turnover Across U.S. Manufacturing Industries," Papers 12-89-2, Pennsylvania State - Department of Economics.
    18. repec:ags:joaaec:v:33:y:2001:i:1:p:35-48 is not listed on IDEAS
    19. KS Pietola & AO Lansink, 2001. "Farmer response to policies promoting organic farming technologies in Finland," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 28(1), pages 1-15, March.
    20. Tzouvelekas, Vangelis & Pantzios, Christos J. & Fotopoulos, Christos, 2001. "Technical efficiency of alternative farming systems: the case of Greek organic and conventional olive-growing farms," Food Policy, Elsevier, vol. 26(6), pages 549-569, December.
    21. Baltagi, Badi H & Griffin, James M, 1988. "A General Index of Technical Change," Journal of Political Economy, University of Chicago Press, vol. 96(1), pages 20-41, February.
    22. Baltagi, Badi H & Griffin, James M & Rich, Daniel P, 1995. "Airline Deregulation: The Cost Pieces of the Puzzle," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(1), pages 245-260, February.
    23. Audretsch, David B & Mahmood, Talat, 1995. "New Firm Survival: New Results Using a Hazard Function," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 97-103, February.
    24. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    25. David Audretsch, 1994. "Business Survival and the Decision to Exit," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 1(1), pages 125-137.
    26. Flaten, Ola & Lien, Gudbrand D., 2005. "Stochastic Utility-Efficient Programming of Organic Dairy Farms," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24743, European Association of Agricultural Economists.
    27. Tzouvelekas, Vangelis & Pantzios, Christos J. & Fotopoulos, Christos, 2002. "Empirical Evidence of Technical Efficiency Levels in Greek Organic and Conventional Farms," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 3(2), pages 1-12, August.
    28. Fotopoulos, Georgios & Louri, Helen, 2000. "Location and Survival of New Entry," Small Business Economics, Springer, vol. 14(4), pages 311-321, June.
    29. Johannes Sauer, 2006. "Economic Theory and Econometric Practice: Parametric Efficiency Analysis," Empirical Economics, Springer, vol. 31(4), pages 1061-1087, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Basurto Hernandez, Saul & Maddison, David & Banerjee, Anindya, 2018. "The effect of PROCAMPO on farms’ technical efficiency: A Stochastic Frontier Analysis," 2018 Annual Meeting, August 5-7, Washington, D.C. 274376, Agricultural and Applied Economics Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sauer, Johannes & Graversen, Jesper T. & Park, Timothy A., 2006. "Breathtaking or Stagnating? - Productivity, Technical Change and Structural Dynamics in Danish Organic Farming," 2006 Annual meeting, July 23-26, Long Beach, CA 21481, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Sauer, Johannes & Park, Tim, 2009. "Organic farming in Scandinavia -- Productivity and market exit," Ecological Economics, Elsevier, vol. 68(8-9), pages 2243-2254, June.
    3. Dimara, Efthalia & Skuras, Dimitris & Tsekouras, Kostas & Tzelepis, Dimitris, 2008. "Productive efficiency and firm exit in the food sector," Food Policy, Elsevier, vol. 33(2), pages 185-196, April.
    4. Madau, Fabio A., 2005. "Technical Efficiency in Organic Farming: An Application on Italian Cereal Farms Using a Parametric Approach," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24545, European Association of Agricultural Economists.
    5. Efthymios Tsionas & Theodore Papadogonas, 2006. "Firm exit and technical inefficiency," Empirical Economics, Springer, vol. 31(2), pages 535-548, June.
    6. Helen Louri & Costas Peppas & Efthymios Tsionas, 2006. "Foreign Presence, Technical Efficiency and Firm Survival in Greece: A Simultaneous Equation Model with Latent Variables Approach," International Studies in Entrepreneurship, in: Enrico Santarelli (ed.), Entrepreneurship, Growth, and Innovation, chapter 0, pages 199-221, Springer.
    7. Lakner, Sebastian & Breustedt, Gunnar, 2015. "Efficiency analysis of organic farming systems- a review of methods, topics, results, and conclusions," 2015 Conference, August 9-14, 2015, Milan, Italy 212025, International Association of Agricultural Economists.
    8. Paul H. Jensen & Elizabeth Webster & Hielke Buddelmeyer, 2008. "Innovation, Technological Conditions and New Firm Survival," The Economic Record, The Economic Society of Australia, vol. 84(267), pages 434-448, December.
    9. Christos Genakos & Ioannis Kaplanis & Maria Theano Tagaraki & Aggelos Tsakanikas, 2023. "Firm Resilience and Growth during the Economics Crisis: lessons from the Greek depression," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 186, Hellenic Observatory, LSE.
    10. Subal Kumbhakar & Efthymios Tsionas & Timo Sipiläinen, 2009. "Joint estimation of technology choice and technical efficiency: an application to organic and conventional dairy farming," Journal of Productivity Analysis, Springer, vol. 31(3), pages 151-161, June.
    11. Cisilino, Federica & Madau, Fabio A., 2007. "Organic and Conventional Farming: a Comparison Analysis through the Italian FADN," MPRA Paper 21786, University Library of Munich, Germany.
    12. Alexandra Tsvetkova & Jean-Claude Thill & Deborah Strumsky, 2014. "Metropolitan innovation, firm size, and business survival in a high-tech industry," Small Business Economics, Springer, vol. 43(3), pages 661-676, October.
    13. Richard I.D. Harris & Qian Cher Li, "undated". "Export-market dynamics and the probability of firm closure: Evidence for the UK," Working Papers 2008_17, Business School - Economics, University of Glasgow.
    14. Stefan Buehler & Christian Kaiser & Franz Jaeger, 2012. "The geographic determinants of bankruptcy: evidence from Switzerland," Small Business Economics, Springer, vol. 39(1), pages 231-251, July.
    15. Mastromarco, Camilla & Zago, Angelo, 2012. "On modeling the determinants of TFP growth," Structural Change and Economic Dynamics, Elsevier, vol. 23(4), pages 373-382.
    16. Christos, Genakos & Kaplanis, Ioannis & Tagaraki, Maria Theano & Tsakanikas, Aggelos, 2023. "Firm resilience and growth during the economics crisis: lessons from the Greek depression," LSE Research Online Documents on Economics 119705, London School of Economics and Political Science, LSE Library.
    17. Marcelo Resende & Vicente Cardoso & Luis Otávio Façanha, 2016. "Determinants of survival of newly created SMEs in the Brazilian manufacturing industry: an econometric study," Empirical Economics, Springer, vol. 50(4), pages 1255-1274, June.
    18. Teresa Serra & Barry Goodwin, 2009. "The efficiency of Spanish arable crop organic farms, a local maximum likelihood approach," Journal of Productivity Analysis, Springer, vol. 31(2), pages 113-124, April.
    19. Arandia Miura, Amaia & Aldanondo-Ochoa, Ana, 2008. "Social Versus Private Efficiency: A Comparison of Conventional and Organic Farming Systems in Vineyard Production," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44416, European Association of Agricultural Economists.
    20. Raquel Ortega-Argilés & Rosina Moreno, 2005. "Firm Competitive Strategies And The Likelihood Of Survival - The Spanish Case," ERSA conference papers ersa05p347, European Regional Science Association.

    More about this item

    Keywords

    Agribusiness; Productivity Analysis;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:gewi07:7618. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/gewisea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.