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The Use of Bootstrapped Malmquist Indices to Reassess Productivity Change Findings: An Application to a Sample of Polish Farms

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  • Balcombe, Kelvin George
  • Davidova, Sophia
  • Latruffe, Laure

Abstract

The paper assesses the extent to which sampling variation affects findings about Malmquist productivity change derived using Data Envelopment Analysis (DEA), in the first stage calculating productivity indices and in the second stage investigating the farm-specific change in productivity. Confidence intervals for Malmquist indices are constructed using Simar and Wilson's (1999) bootstrapping procedure. The main contribution of the paper is to account in the second stage for the information provided by the bootstrap in the first stage. The DEA standard errors of the Malmquist indices given by bootstrapping are employed in an innovative heteroscedastic panel regression, using a maximum likelihood procedure. The application is to a sample of 250 Polish farms over the period 1996-2000. The confidence interval's results suggest that contrary to what was reported by previous studies, the second half of 1990s for Polish farms was characterised not so much by productivity regress but rather by stagnation. As for the determinants of farm productivity change, we find that the integration of the DEA standard errors in the second-stage regression is significant in explaining a proportion of the variance in the error term. Although our heteroscedastic regression results differ with those from the standard Ordinary Least Squares, in terms of significance (fewer parameters are significant in our heteroscedastic regression) and sign (of the parameter of the share of other income in total income), they are consistent with theory and previous research. Family farms concentrating on farming experienced larger productivity progress than farms with hired labour and income diversification.

Suggested Citation

  • Balcombe, Kelvin George & Davidova, Sophia & Latruffe, Laure, 2006. "The Use of Bootstrapped Malmquist Indices to Reassess Productivity Change Findings: An Application to a Sample of Polish Farms," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25793, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae06:25793
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    References listed on IDEAS

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    1. Léopold Simar & Paul Wilson, 2000. "Statistical Inference in Nonparametric Frontier Models: The State of the Art," Journal of Productivity Analysis, Springer, pages 49-78.
    2. Léopold Simar & Paul W. Wilson, 1998. "Sensitivity Analysis of Efficiency Scores: How to Bootstrap in Nonparametric Frontier Models," Management Science, INFORMS, vol. 44(1), pages 49-61, January.
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    11. Simar, Leopold & Wilson, Paul W., 2007. "Estimation and inference in two-stage, semi-parametric models of production processes," Journal of Econometrics, Elsevier, vol. 136(1), pages 31-64, January.
    12. Chieko Umetsu & Thamana Lekprichakul & Ujjayant Chakravorty, 2003. "Efficiency and Technical Change in the Philippine Rice Sector: A Malmquist Total Factor Productivity Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 943-963.
    13. Chaplin, Hannah & Davidova, Sophia & Gorton, Matthew, 2002. "Non-Agricultural Diversification of Farm Households and Corporate Farms in Central Europe," Workshop on the Farm Household-Firm Unit: Its Importance in Agriculture and Implications for Statistics, April 12-13, 2002, Wye Campus,Imperial College 15728, International Agricultural Policy Reform and Adjustment Project (IAPRAP).
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    Cited by:

    1. Sethi, Amarjit Singh, 2016. "Sources of Growth in India: Evidence from Punjab and Haryana," Journal of Regional Development and Planning, JRDP, vol. 5(1), pages 15-34.
    2. Bruno De Borger & Kristiaan Kerstens & Diego Prior & Ignace Van de Woestyne, 2013. "Static efficiency decompositions and capacity utilization: integrating economic and technical capacity notions," Applied Economics, Taylor & Francis Journals, vol. 45(24), pages 3529-3529, August.
    3. Tomas Baležentis, 2014. "Total factor productivity in the Lithuanian family farms after accession to the EU: application of the bias-corrected Malmquist indices," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 41(4), pages 731-746, November.
    4. Baležentis, Tomas & De Witte, Kristof, 2015. "One- and multi-directional conditional efficiency measurement – Efficiency in Lithuanian family farms," European Journal of Operational Research, Elsevier, vol. 245(2), pages 612-622.
    5. repec:hur:ijarbs:v:7:y:2017:i:3:p:440-457 is not listed on IDEAS
    6. Boon L. Lee, 2013. "Productivity, technical and efficiency change in Singapore's services sector, 2005 to 2008," Applied Economics, Taylor & Francis Journals, vol. 45(15), pages 2023-2029, May.
    7. Rodrigo Taborda & Julieth Santamaría, 2011. "Productivity growth in electric energy retail in Colombia. A bootstrapped malmquist indices approach," DOCUMENTOS DE TRABAJO 009152, UNIVERSIDAD DEL ROSARIO.
    8. Aleksandra Parteka & Joanna Wolszczak-Derlacz, 2013. "Dynamics of productivity in higher education: cross-european evidence based on bootstrapped Malmquist indices," Journal of Productivity Analysis, Springer, vol. 40(1), pages 67-82, August.
    9. Liu, John S. & Lu, Louis Y.Y. & Lu, Wen-Min & Lin, Bruce J.Y., 2013. "Data envelopment analysis 1978–2010: A citation-based literature survey," Omega, Elsevier, vol. 41(1), pages 3-15.
    10. Arjomandi, Amir & Valadkhani, Abbas & Harvie, Charles, 2011. "Analysing Productivity Changes Using the Bootstrapped Malmquist Approach: The Case of the Iranian Banking Industry," MPRA Paper 50397, University Library of Munich, Germany.
    11. Boon L Lee, 2012. "Efficiency and Productivity of Singapore's Manufacturing Sector 2001-2010: An analysis using Simar and Wilson's (2007) bootstrapped truncated approach," School of Economics and Finance Discussion Papers and Working Papers Series 283, School of Economics and Finance, Queensland University of Technology.
    12. Assaf, A. George & Gillen, David & Barros, Carlos, 2012. "Performance assessment of UK airports: Evidence from a Bayesian dynamic frontier model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(3), pages 603-615.
    13. Olson, Kent D. & Vu, Linh, 2009. "Productivity Growth, Technical Efficiency and Technical Change on Minnesota Farms," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49204, Agricultural and Applied Economics Association.

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