IDEAS home Printed from https://ideas.repec.org/a/eme/caerpp/v2y2010i4p420-432.html
   My bibliography  Save this article

Estimating and analysing cost efficiency of sawmill industries in Nigeria

Author

Listed:
  • Kolawole Ogundari

Abstract

Purpose - The purpose of this paper is to examine cost efficiency and its determinants in Nigerian sawmill industries. Design/methodology/approach - A stochastic frontier model is employed on a total of 160 mills randomly selected across five states in south‐western Nigeria in 2006. Findings - The results show an estimated average cost efficiency of 1.262. This suggests that an average mill incurs about 26 per cent costs above the frontier cost when processing planks from logs. Further analysis indicates that a significant level of cost ineffisciency is present in Nigeria's sawmilling industry. Analysis of determinants of cost efficiency reveals that more years of education, experience, age, and level of capital investment reduce cost inefficiencies between 7 and 16 per cent. Sawmill operation is found to be associated with economies of scale in the study area. Originality/value - The paper contributes to existing studies on the efficiency of sawmill industries in Nigeria by taking a holistic assessment of the industry from a cost perspective.

Suggested Citation

  • Kolawole Ogundari, 2010. "Estimating and analysing cost efficiency of sawmill industries in Nigeria," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 2(4), pages 420-432, November.
    • Handle: RePEc:eme:caerpp:v:2:y:2010:i:4:p:420-432
    DOI: 10.1108/17561371011097731
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/17561371011097731/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/17561371011097731/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/17561371011097731?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
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Wilson, Paul & Hadley, David & Asby, Carol, 2001. "The influence of management characteristics on the technical efficiency of wheat farmers in eastern England," Agricultural Economics, Blackwell, vol. 24(3), pages 329-338, March.
    2. Ryan, David L. & Wales, Terence J., 2000. "Imposing local concavity in the translog and generalized Leontief cost functions," Economics Letters, Elsevier, vol. 67(3), pages 253-260, June.
    3. Johannes Sauer & Klaus Frohberg & Henrich Hockmann, 2006. "Stochastic efficiency measurement: The curse of theoretical consistency," Journal of Applied Economics, Universidad del CEMA, vol. 9, pages 139-166, May.
    4. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
    5. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    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. Majiwa, E. & Mugodo, C., 2018. "Technical efficiency and technology gap ratios among rice farmers in Kenya," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277209, International Association of Agricultural Economists.

    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. Tai-Hsin Huang & Yi-Huang Chiu & Chih-Ying Mao, 2021. "Imposing Regularity Conditions to Measure Banks’ Productivity Changes in Taiwan Using a Stochastic Approach," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 28(2), pages 273-303, June.
    2. Wollni, Meike & Brümmer, Bernhard, 2012. "Productive efficiency of specialty and conventional coffee farmers in Costa Rica: Accounting for technological heterogeneity and self-selection," Food Policy, Elsevier, vol. 37(1), pages 67-76.
    3. Ali D. Cagdas & Scott R. Jeffrey & Elwin G. Smith & Peter C. Boxall, 2016. "Environmental Stewardship and Technical Efficiency in Canadian Prairie Canola Production," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 64(3), pages 455-477, September.
    4. Niquidet, Kurt & Nelson, Harry, 2010. "Sawmill production in the interior of British Columbia: A stochastic ray frontier approach," Journal of Forest Economics, Elsevier, vol. 16(4), pages 257-267, December.
    5. Holger Seebens & Johannes Sauer, 2007. "Bargaining power and efficiency-rural households in Ethiopia," Journal of International Development, John Wiley & Sons, Ltd., vol. 19(7), pages 895-918.
    6. Ripoll-Zarraga, Ane Elixabete & Huderek-Glapska, Sonia, 2021. "Airports’ managerial human capital, ownership, and efficiency," Journal of Air Transport Management, Elsevier, vol. 92(C).
    7. Balint, Borbala & Sauer, Johannes, 2006. "Distorted Prices And Producer Efficiency - Romanian Maize," 46th Annual Conference, Giessen, Germany, October 4-6, 2006 14958, German Association of Agricultural Economists (GEWISOLA).
    8. Balint, B. & Sauer, J., 2007. "Distorted Prices and Producer Efficiency – Romanian Maize," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 42, March.
    9. Collier, Trevor & Johnson, Andrew L. & Ruggiero, John, 2011. "Technical efficiency estimation with multiple inputs and multiple outputs using regression analysis," European Journal of Operational Research, Elsevier, vol. 208(2), pages 153-160, January.
    10. Power, Brendan & Cacho, Oscar J, 2014. "Identifying risk-efficient strategies using stochastic frontier analysis and simulation: An application to irrigated cropping in Australia," Agricultural Systems, Elsevier, vol. 125(C), pages 23-32.
    11. Sauer, Johannes & Balint, Borbala, 2006. "Romanian Maize - Distorted Prices and Producer Efficiency," 2006 Annual meeting, July 23-26, Long Beach, CA 21410, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Pede, Valerien O. & McKinley, Justin & Singbo, Alphonse & Kajisa, Kei, 2015. "Spatial Dependency of Technical Efficiency in Rice Farming: The Case of Bohol, Philippines," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205456, Agricultural and Applied Economics Association.
    13. Tanira T. Kingi & Tom F. Kompas, 2005. "Communal Land Ownership and Agricultural Development: Overcoming Technical Efficiency Constraints Among Fiji’s Indigenous Sugercane Growers," International and Development Economics Working Papers idec05-11, International and Development Economics.
    14. Ajuruchukwu Obi & Balogun Taofeek Ayodeji, 2020. "Determinants of Economic Farm-Size–Efficiency Relationship in Smallholder Maize Farms in the Eastern Cape Province of South Africa," Agriculture, MDPI, vol. 10(4), pages 1-18, April.
    15. Rouf, Abdur, 2015. "Conventional vs Natural Flood Control and Drainage Managements in a Tidal Coastal Zone: An Evaluation from a Productive Efficiency Perspective," 89th Annual Conference, April 13-15, 2015, Warwick University, Coventry, UK 256023, Agricultural Economics Society.
    16. Mohottala G. Kularatne & Namal N. Balasooriya & Sean Pascoe & Clevo Wilson, 2017. "Is there a locational productivity advantage for rice cultivation? Results from a technical efficiency analysis of water use in Sri Lankan village irrigation systems," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 19(4), pages 789-806, October.
    17. O'Donnell, Christopher J. & Coelli, Timothy J., 2005. "A Bayesian approach to imposing curvature on distance functions," Journal of Econometrics, Elsevier, vol. 126(2), pages 493-523, June.
    18. Daniel Solís & Boris E. Bravo‐Ureta & Ricardo E. Quiroga, 2009. "Technical Efficiency among Peasant Farmers Participating in Natural Resource Management Programmes in Central America," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(1), pages 202-219, February.
    19. Imori, Denise & Guilhoto, Joaquim José Martins & Postali, Fernando Antonio Slaibe, 2012. "Eficiência técnica das agropecuárias familiar e patronal – diferenças regionais no Brasil [Technical efficiency of agricultural households and business - regional differences in Brazil]," MPRA Paper 46954, University Library of Munich, Germany.
    20. Phatima MAMARDASHVILI & Dierk SCHMID, 2013. "Performance of Swiss dairy farms under provision of public goods," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 59(7), pages 300-314.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    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:eme:caerpp:v:2:y:2010:i:4:p:420-432. 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: Emerald Support (email available below). General contact details of provider: .

    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.