Agglomeration externalities and technical efficiency in French pig production

Solène Larue and Laure Latruffe

No 09-10, Working Papers SMART from INRAE UMR SMART

Abstract: The objective of the paper is to assess the effects of spatial agglomeration on the technical efficiency of French pig farms. We use a two-stage method with the first stage consisting of calculating the efficiency scores of pig activity with the non-parametric Data Envelopment Analysis (DEA) method, and the second stage being a regression of these scores on agglomeration variables. Data consist of 936 French pig producers in 2004. Results suggest that these farms were as much affected by positive agglomeration externalities (in the form of knowledge spillovers due to the density of farms, and arising from their closeness to downstream markets) as any other businesses. Our analysis also sheds light on the specificity of the sector, namely that environment pressures can force pig farmers to be more efficient, an effect that may be counteracted when legal dispositions relating to manure spreading are too stringent.

Keywords: technical efficiency; Data Envelopment Analysis; agglomeration; environmental regulation; hog production; France (search for similar items in EconPapers)
JEL-codes: Q12 R3 (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-agr, nep-eff, nep-sbm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Working Paper: Agglomeration externalities and technical efficiency in French pig production (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:rae:wpaper:200910

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