Impact of public subsidies on persistent and transient technical efficiency: evidence from French mixed crop-livestock farms

Jean Joseph Minviel, Timo Sipiläinen, Laure Latruffe and Boris E. Bravo-Ureta

Applied Economics, 2024, vol. 56, issue 55, 7286-7301

Abstract: This study contributes to the existing literature on the influence of public subsidies on farmers’ technical efficiency by highlighting the importance of separating persistent and transient inefficiency. Using data from a sample of French mixed (crop-livestock) farms, and relying on recent developments in stochastic frontier analysis, we find that public subsidies are positively associated with both persistent and transient technical inefficiency. The effect of public subsidies on persistent technical inefficiency suggests that they induce sluggish adjustments (restructuring) in farm management practices.

Date: 2024
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DOI: 10.1080/00036846.2023.2281289

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