The role of public subsidies on farms’ managerial efficiency: An application of a five-stage approach to France

Laure Latruffe, Hervé Guyomard and Chantal Le Mouël

No 09-05, Working Papers SMART from INRAE UMR SMART

Abstract: This paper applies a five-step approach to the investigation of the relationship between public subsidies, namely CAP direct payments, and managerial efficiency for French COP and beef farms in 2000. Managerial efficiency scores are calculated using a four-step approach that allows disentangling managerial inefficiency from unfavourable external conditions. Then, in a fifth stage, managerial efficiency scores are regressed over a set of explanatory variables, including CAP direct payments. Using individual farm data and meteorological data at the municipality level, we show that there is a non negligible component of inefficiency that is due to unfavourable conditions, and there is a strong significant negative relationship between managerial efficiency and CAP direct payments.

Keywords: technical efficiency; managerial efficiency; direct payments; farms; France (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-eff
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Citations: View citations in EconPapers (14)

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Working Paper: The role of public subsidies on farms’ managerial efficiency: An application of a five-stage approach to France (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:rae:wpaper:200905

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