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Agglomeration Externalities and Technical Efficiency in Pig Production

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  • Larue, Solene
  • Latruffe, Laure

Abstract

The objective of the paper is to assess the effects of agglomeration on technical efficiency of French pig farms. We use a two-stage method to evaluate the effects of agglomeration on technical efficiency. The first stage consists in calculating pig activity’s efficiency scores with the non-parametric method Data Envelopment Analysis (DEA). The second stage is a truncated regression of these scores on agglomeration variables. Data are for 899 French pig producers in 2004. Results suggest that these farms were as much affected by positive agglomeration externalities (that are knowledge spillovers due to farms’ density, and also arise from farms’ closeness to downstream market) as any other businesses. There was however no evidence of negative externalities in the form of constraints in farmers’ land demand due to legal disposition relating to manure spreading.

Suggested Citation

  • Larue, Solene & Latruffe, Laure, 2008. "Agglomeration Externalities and Technical Efficiency in Pig Production," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44272, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaae08:44272
    DOI: 10.22004/ag.econ.44272
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    References listed on IDEAS

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    1. Larue, Solene & Abildtrup, Jens & Schmitt, Bertrand, 2008. "Modelling the Spatial Structure of Pig Production in Denmark," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44281, European Association of Agricultural Economists.
    2. Henderson, J V, 1974. "The Sizes and Types of Cities," American Economic Review, American Economic Association, vol. 64(4), pages 640-656, September.
    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. Duranton, Gilles & Puga, Diego, 2004. "Micro-foundations of urban agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.),Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 48, pages 2063-2117, Elsevier.
    5. Laure Latruffe & Kelvin Balcombe & Sophia Davidova & Katarzyna Zawalinska, 2005. "Technical and scale efficiency of crop and livestock farms in Poland : does specialization matte r?," Post-Print hal-02392195, HAL.
    6. Brian Roe & Elena G. Irwin & Jeff S. Sharp, 2002. "Pigs in Space: Modeling the Spatial Structure of Hog Production in Traditional and Nontraditional Production Regions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(2), pages 259-278.
    7. Ragnar Tveteras & George E. Battese, 2006. "Agglomeration Externalities, Productivity, And Technical Inefficiency," Journal of Regional Science, Wiley Blackwell, vol. 46(4), pages 605-625, October.
    8. Rosenthal, Stuart S. & Strange, William C., 2004. "Evidence on the nature and sources of agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.),Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 49, pages 2119-2171, Elsevier.
    9. Isabelle Piot-Lepetit & Monique Moing, 2007. "Productivity and environmental regulation: the effect of the nitrates directive in the French pig sector," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 38(4), pages 433-446, December.
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    Cited by:

    1. Kenichi Kashiwagi & Erina Iwasaki, 2020. "Effect of agglomeration on technical efficiency of small and medium‐sized garment firms in Egypt," African Development Review, African Development Bank, vol. 32(1), pages 14-26, March.

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    Keywords

    Industrial Organization; Livestock Production/Industries;

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