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Technical efficiency in the Chilean agribusiness sector


  • Rivera Aedo, Edinson
  • Lakner, Sebastian
  • Brümmer, Bernhard


The reform-process towards a higher world-market orientation has a long tradition in Chile, with all its strengths and weaknesses. The food processing industry is highly competitive on the worldmarket. The following paper investigates the technical efficiency of the Chilean food processing industry between 2001 and 2007. We used a data-set from the 5,941 of firms in food processing industry. The observations are taken of the 'Annual National Industrial Survey'. The method of stochastic frontier analysis is applied; the heteroscedasticity-model is used in order to analyze the determinants of technical efficiency. We included variables capturing different effects before and after the introduction of a liberalization policy in 2004. Raw materials and labor have to largest impact on the output. We could show that technical efficiency is different in the periods before and after 2004. The region with the highest level of efficiency is the metropolitan region around Santiago de Chile.

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  • Rivera Aedo, Edinson & Lakner, Sebastian & Brümmer, Bernhard, 2011. "Technical efficiency in the Chilean agribusiness sector," IAMO Forum 2011: Will the "BRICs Decade" Continue? – Prospects for Trade and Growth 10, Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO).
  • Handle: RePEc:zbw:iamo11:10

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    1. Ruhul Salim & Amzad Hossain, 2006. "Market deregulation, trade liberalization and productive efficiency in Bangladesh agriculture: an empirical analysis," Applied Economics, Taylor & Francis Journals, vol. 38(21), pages 2567-2580.
    2. Schmidt, Peter & Sickles, Robin C, 1984. "Production Frontiers and Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 367-374, October.
    3. George Battese & D. Rao & Christopher O'Donnell, 2004. "A Metafrontier Production Function for Estimation of Technical Efficiencies and Technology Gaps for Firms Operating Under Different Technologies," Journal of Productivity Analysis, Springer, vol. 21(1), pages 91-103, January.
    4. Caudill, Steven B & Ford, Jon M & Gropper, Daniel M, 1995. "Frontier Estimation and Firm-Specific Inefficiency Measures in the Presence of Heteroscedasticity," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(1), pages 105-111, January.
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    Technical Efficiency; Food Processing Industry; Chile;

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