Impact of Financial Variables on Production in Kansas Farms Efficiencies
This article establishes the cost-efficiency frontier and its variation over time for a sample of 610 farms in Kansas for ten consecutive years, from 1995 to 2004. The primary objective consists of examining how financially constrained firms affect cost efficiency and its components, allocative, technical and scale efficiency. Using a sample from the Kansas Farm Management Association and data envelopment analysis (DEA) technique, each farm is measured against the rest of the sample to calculate the cost efficiency frontier and other measures of efficiency per year. Two DEA financially constrained models, constrained by solvency and level of debt of the firms respectively, are compared to the basic one in which firms are non-constrained. We test whether the debt and solvency constraints are binding, and how much and in which direction they affect the level of cost efficiency, technical efficiency, allocative efficiency, and scale efficiency. Results for the farms and period studied show that financial constraints do not impede farms from achieving their level of cost efficiency. However, in the presence of financial constraints, farms' level of technical efficiency decreases whereas their level of allocative efficiency increases.
|Date of creation:||2006|
|Date of revision:|
|Contact details of provider:|| Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202|
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Coelli, Tim J., 1995.
"Recent Developments In Frontier Modelling And Efficiency Measurement,"
Australian Journal of Agricultural Economics,
Australian Agricultural and Resource Economics Society, vol. 39(03), December.
- Tim J. Coelli, 1995. "Recent Developments In Frontier Modelling And Efficiency Measurement," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 39(3), pages 219-245, December.
- Coelli, T. J., 1995. "Recent Developments in Frontier Modelling and Efficiency Measurement," 1995 Conference (39th), February 14-16, 1995, Perth, Australia 148798, Australian Agricultural and Resource Economics Society.
- Chavas, Jean-Paul & Aliber, Michael, 1993. "An Analysis Of Economic Efficiency In Agriculture: A Nonparametric Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 18(01), July.
- Bravo-Ureta, Boris E. & Pinheiro, Antonio E., 1993. "Efficiency Analysis Of Developing Country Agriculture: A Review Of The Frontier Function Literature," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 22(1), April.
- Nivens, Heather D. & Kastens, Terry L. & Dhuyvetter, Kevin C., 2002. "Payoffs To Farm Management: How Important Is Crop Marketing?," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 34(01), April.
- Battese, George E., 1992. "Frontier production functions and technical efficiency: a survey of empirical applications in agricultural economics," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 7(3-4), October.
- Hadley, David & Shankar, Bhavani & Thirtle, Colin G. & Coelli, Tim J., 2001. "Financial Exposure, Technical Change And Farm Efficiency: Evidence From The England And Wales Dairy Sector," 2001 Annual meeting, August 5-8, Chicago, IL 20656, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Claudia Girardone & Philip Molyneux & Edward Gardener, 2004. "Analysing the determinants of bank efficiency: the case of Italian banks," Applied Economics, Taylor & Francis Journals, vol. 36(3), pages 215-227.
- Catherine J. Morrison Paul & Warren E. Johnston & Gerald A. G. Frengley, 2000. "Efficiency in New Zealand Sheep and Beef Farming: The Impacts of Regulatory Reform," The Review of Economics and Statistics, MIT Press, vol. 82(2), pages 325-337, May.
- Thiam, Abdourahmane & Bravo-Ureta, Boris E. & Rivas, Teodoro E., 2001.
"Technical efficiency in developing country agriculture: a meta-analysis,"
Blackwell, vol. 25(2-3), pages 235-243, September.
- Thiam, Abdourahmane & Bravo-Ureta, Boris E. & Rivas, Teodoro E., 2001. "Technical efficiency in developing country agriculture: a meta-analysis," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 25(2-3), September.
- Russell, Levi A. & Briggeman, Brian C. & Featherstone, Allen M., 2013. "Debt and Input Misallocation in Farm Supply and Marketing Cooperatives: A DEA Approach," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150445, Agricultural and Applied Economics Association.
- Ray,Subhash C., 2004. "Data Envelopment Analysis," Cambridge Books, Cambridge University Press, number 9780521802567, 1.
- 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.
- Battese, George E., 1992. "Frontier production functions and technical efficiency: a survey of empirical applications in agricultural economics," Agricultural Economics, Blackwell, vol. 7(3-4), pages 185-208, October.
- Varian, Hal R., 1990. "Goodness-of-fit in optimizing models," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 125-140.
- Ralph Bierlen & Allen M. Featherstone, 1998. "Fundamental q, Cash Flow, and Investment: Evidence from Farm Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(3), pages 427-435, August.
- Tauer, Loren W. & Hanchar, John J., 1995. "Nonparametric Technical Efficiency With K Firms, N Inputs, And M Outputs: A Simulation," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 24(2), October.
- Ferrier, Gary D. & Lovell, C. A. Knox, 1990. "Measuring cost efficiency in banking : Econometric and linear programming evidence," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 229-245.
- Massimiliano Piacenza, 2006. "Regulatory Contracts and Cost Efficiency: Stochastic Frontier Evidence from the Italian Local Public Transport," Journal of Productivity Analysis, Springer, vol. 25(3), pages 257-277, 06.
When requesting a correction, please mention this item's handle: RePEc:ags:aaea06:21406. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.