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Explaining Productivity Differentials in Eastern European Agriculture: Efficiency or Class Structure ?

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  • Daniela BORODAK

    () (Centre d'Etudes et de Recherches sur le Développement International(CERDI))

  • Jean-Louis ARCAND

    ()

Abstract

This paper considers whether it is differences in technical efficiency or differences in factor endowments that explain productivity differentials in Moldovan agriculture. We compute non-parametric measures of technical efficiency for a sample of Moldovan small-holders using the four-step Data Envelopment Analysis (DEA) approach suggested by Fried, Schmidt and Yaisawang (1999). We also consider a model of class structure inspired by the work of Eswaran and Kotwal (1986), and estimate a bivariate probit model that explains a household's labor market participation decisions (and hence class membership) in terms of its factor endowments. These constructs are then used in an effort to understand the determinants of output per hectare in Moldovan agriculture. We find that differences in technical efficiency explain very little of the great heterogeneity in productivity observed in our sample, while class membership is slightly more successful. Our empirical model of class structure suggests that self sufficient households will disappear and be replaced by a class of small capitalist farmers as land and credit markets develop.

Suggested Citation

  • Daniela BORODAK & Jean-Louis ARCAND, 2006. "Explaining Productivity Differentials in Eastern European Agriculture: Efficiency or Class Structure ?," Working Papers 200612, CERDI.
  • Handle: RePEc:cdi:wpaper:804
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    References listed on IDEAS

    as
    1. Erik Mathijs & Johan F. M. Swinnen, 2001. "Production Organization And Efficiency During Transition: An Empirical Analysis Of East German Agriculture," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 100-107, February.
    2. Ngwenya, S.A. & Battese, George E. & Fleming, Euan M., 1997. "The Relationship Between Farm Size and Technical Inefficiency of Production of Wheat Farmers in the Eastern Free State, Province of South Africa," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 36(3), September.
    3. Nivelin Noev & Johan F.M. Swinnen, 2004. "Eastern Europe and the Former Soviet Union," Chapters,in: The World's Wine Markets, chapter 9 Edward Elgar Publishing.
    4. Gallagher, Marcos & Goetz, Stephan J. & Debertin, David L., 1997. "Efficiency Effects of Institutional Factors: Limited-Resource Farms in Northeast Argentina," Occasional Paper Series No. 7 198047, International Association of Agricultural Economists.
    5. Brada, Josef C & King, Arthur E, 1993. "Is Private Farming More Efficient Than Socialized Agriculture?," Economica, London School of Economics and Political Science, vol. 60(237), pages 41-56, February.
    6. Jones, Derek & Klinedinst, Mark & Rock, Charles, 1998. "Productive Efficiency during Transition: Evidence from Bulgarian Panel Data," Journal of Comparative Economics, Elsevier, vol. 26(3), pages 446-464, September.
    7. Eswaran, Mukesh & Kotwal, Ashok, 1986. "Access to Capital and Agrarian Production Organisation," Economic Journal, Royal Economic Society, vol. 96(382), pages 482-498, June.
    8. Piesse, Jenifer & Thirtle, Colin & Turk, Jernej, 1996. "Efficiency and Ownership in Slovene Dairying: A Comparison of Econometric and Programming Techniques," Journal of Comparative Economics, Elsevier, vol. 22(1), pages 1-22, February.
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