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The productivity performance of Finnish and Norwegian dairy farms: the effect of joining/not joining the EU

  • Marte Bjørnsen

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  • Gudbrand Lien
  • Timo Sipiläinen
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    Dairy production has long been the most important production line in Finnish and Norwegian agriculture. Prior to Finland joining the EU, farm structure as well as national agricultural policy was very similar in the two countries. In this paper, we explore development and differences in productivity and efficiency trends in the two countries before and after 1994 when Finland joined the EU. The challenge is to isolate the effect of EU-membership from other events like introduction of milk quotas, and more generally, changes in agricultural policy and macro-economic factors. We model productivity growth by means of standard production efficiency frontier models on twenty-year panels of Finnish and Norwegian farm accounts data.

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    File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa11/e110830aFinal00793.pdf
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    Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa11p793.

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    Date of creation: Sep 2011
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    Handle: RePEc:wiw:wiwrsa:ersa11p793
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    1. William Greene, 2002. "Fixed and Random Effects in Stochastic Frontier Models," Working Papers 02-16, New York University, Leonard N. Stern School of Business, Department of Economics.
    2. Carol Newman & Alan Matthews, 2006. "The productivity performance of Irish dairy farms 1984–2000: a multiple output distance function approach," Journal of Productivity Analysis, Springer, vol. 26(2), pages 191-205, October.
    3. David M. Miller & P. Mohan Rao, 1989. "Analysis of Profit-Linked Total-Factor Productivity Measurement Models at the Firm Level," Management Science, INFORMS, vol. 35(6), pages 757-767, June.
    4. Greene, William, 2005. "Reconsidering heterogeneity in panel data estimators of the stochastic frontier model," Journal of Econometrics, Elsevier, vol. 126(2), pages 269-303, June.
    5. Bernhard Br�mmer & Thomas Glauben & Geert Thijssen, 2002. "Decomposition of Productivity Growth Using Distance Functions: The Case of Dairy Farms in Three European Countries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 628-644.
    6. Pitt, Mark M. & Lee, Lung-Fei, 1981. "The measurement and sources of technical inefficiency in the Indonesian weaving industry," Journal of Development Economics, Elsevier, vol. 9(1), pages 43-64, August.
    7. Schmidt, Peter & Sickles, Robin C, 1984. "Production Frontiers and Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 367-74, October.
    8. C. A. Knox Lovell & E. Grifell-Tatjé, 1996. "Profits and Productivity," Center for Financial Institutions Working Papers 97-18, Wharton School Center for Financial Institutions, University of Pennsylvania.
    9. Giannis Karagiannis & Peter Midmore & Vangelis Tzouvelekas, 2004. "Parametric Decomposition of Output Growth Using A Stochastic Input Distance Function," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(4), pages 1044-1057.
    10. Kumbhakar, Subal C., 1987. "The specification of technical and allocative inefficiency in stochastic production and profit frontiers," Journal of Econometrics, Elsevier, vol. 34(3), pages 335-348, March.
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