Decomposing Partial Factor Productivity in the Presence of Input-Specific Technical Inefficiency: A Self-Dual Stochastic Production Frontier Approac

Konstantinos Chatzimichael and Vangelis Tzouvelekas

No 724, Working Papers from University of Crete, Department of Economics

Abstract: The present paper provides a theoretical framework for the decomposition of partial factor productivity in the presence of input-specific technical inefficiency. Based on Kuroda’s dual approach and using the theoretical foundations developed by Kopp, we decompose the growth rate of partial factor productivity into five sources, namely, changes in input-specific technical efficiency, substitution effect, technical change, the effect of scale economies and a homotheticity and input biased technological effect. The empirical model is based on a generalized self-dual Cobb-Douglas stochastic production frontier and on the methodological approach for measuring orthogonal input-specific technical efficiency suggested by Reinhard, Lovell and Thijssen. The model is applied to a panel data set of 723 cereal farms in Greece observed during the 1994-2003 cropping period obtained from FADN. The empirical results suggest that the labor productivity of cereal farms has been increased by 2.89 per cent annually. Technical change was found to be the main source of labor productivity (70.4%), while changes in technical efficiency also contributed significantly over the period analyzed (34.7%). On the other hand, substitution effect was found to affect negatively the rate of labor productivity (-14.2%).

Keywords: labor efficiency and productivity growth; multilateral production frontier (search for similar items in EconPapers)
JEL-codes: J23 J24 O40 (search for similar items in EconPapers)
Pages: 59 pages
Date: 2007-05-29
New Economics Papers: this item is included in nep-agr and nep-eff
References: Add references at CitEc
Citations:

Downloads: (external link)
http://economics.soc.uoc.gr/wpa/docs/IER_PFP_May09.pdf Revised version (application/pdf)

Related works:
Journal Article: Human capital contributions to explain productivity differences (2014)
Working Paper: Decomposition of Labor Productivity Growth: A Multilateral Production Frontier Approach (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:crt:wpaper:0724

Access Statistics for this paper

More papers in Working Papers from University of Crete, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Kostis Pigounakis (wpa@econ.soc.uoc.gr).