Development of Total Factor Productivity in Alpine Farming - A Malmquist index approach -
In comparison to flatland agriculture mountainous agriculture is often shaped by small plot sizes, unfavourable climatic conditions and steep slopes. All those conditions make it extraordinarily expensive to implement new technologies and to modernise farms. Consequently our research hypothesis is that technical progress in mountainous regions is slower in comparison to flatland regions. In order to test this hypothesis we develop a model combining a Malmquist index approach with a matching analysis. We apply our model in Austria, using a panel data set comprising the data of 1034 Austrian voluntarily bookkeeping farms and ranging from 2003 to 2009. On basis of the Austrian Mountain Farm Cadastre the farms are classified into five categories expressing the degree of disadvantage which farms are exposed from being located in a mountainous area. Our results show that technical change in mountain regions is significantly lower than in flatland regions and continuously decreasing with increasing disadvantage. Matching our results shows that this result is mainly based on farm grassland share, while farm size is of minor importance. With regard to efficiency change and change of total factor productivity we do not find any significant results.
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