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Productivity measures and effects from subsidies and trade: an empirical analysis for Japan's forestry

  • Shunsuke Managi

Several techniques have been proposed in the literature to measure productivity. While allowing for inefficiency of the production unit, we provide a methodological comparison of alternative approaches to measure total factor productivity. This article evaluates the effects of unintended policy outcomes such as government subsidies and foreign trade. Empirically, we analyse the forest productivity of timber in Japan by using panel data on 46 regions. The results suggest substantial variation in productivity between these two techniques although average trends are similar. We find that subsidies impede competition since the government is ready to rescue a loss-making firm with subsidies rather than allow it to close. In contrast, trade is shown to have positive effects on productivity.

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Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 42 (2010)
Issue (Month): 30 ()
Pages: 3871-3883

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Handle: RePEc:taf:applec:v:42:y:2010:i:30:p:3871-3883
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  1. Kao, Chiang & Chi Yang, Yong, 1992. "Reorganization of forest districts via efficiency measurement," European Journal of Operational Research, Elsevier, vol. 58(3), pages 356-362, May.
  2. Fare, Rolf & Shawna Grosskopf & Mary Norris & Zhongyang Zhang, 1994. "Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries," American Economic Review, American Economic Association, vol. 84(1), pages 66-83, March.
  3. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
  4. Ian Noble & R. J. Scholes, 2001. "Sinks and the Kyoto Protocol," Climate Policy, Taylor & Francis Journals, vol. 1(1), pages 5-25, March.
  5. Peter Kennedy, 2003. "A Guide to Econometrics, 5th Edition," MIT Press Books, The MIT Press, edition 5, volume 1, number 026261183x, June.
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  7. Bogetoft, Peter & Strange, Niels & Thorsen, Bo Jellesmark, 2001. "Efficiency and Merger Gains in The Danish Forestry Extension Service," Unit of Economics Working papers 24210, Royal Veterinary and Agricultural University, Food and Resource Economic Institute.
  8. Jiro Nemoto & Mika Goto, 2003. "Measurement of Dynamic Efficiency in Production: An Application of Data Envelopment Analysis to Japanese Electric Utilities," Journal of Productivity Analysis, Springer, vol. 19(2), pages 191-210, April.
  9. Sedjo, Roger, 1997. "The Forest Sector: Important Innovations," Discussion Papers dp-97-42, Resources For the Future.
  10. Caves, Douglas W & Christensen, Laurits R & Diewert, W Erwin, 1982. "Multilateral Comparisons of Output, Input, and Productivity Using Superlative Index Numbers," Economic Journal, Royal Economic Society, vol. 92(365), pages 73-86, March.
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