Investment, credit constraints and public policy in a neoclassical adjustment cost framework
In: Discussion paper 115
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In: Discussion paper 115
In: Pacific economic review, Band 22, Heft 4, S. 702-719
ISSN: 1468-0106
AbstractThe present study analyses firm heterogeneity and sector‐specific technology. The theoretical model stands on the assumption of maximizing the return on capital and overcomes problems involved in simple profit maximization. The results show that a random parameter model with sector dummies and heteroscedasticity is the most appropriate model specification for distinguishing firm‐level and sector‐level efficiency and heterogeneity. The heterogeneity among firms as well as among sectors was found to be an important characteristic in Czech food processing. This holds for production technology as well as for technical efficiency. Moreover, the decomposition of total variance shows that intrasectoral differences in technologies are much more pronounced than the intersectoral differences. The differences in intrasector heterogeneity also suggest that the food processing industry will be subject to accelerated structural change in the coming years. Moreover, we found that on average the companies highly exploit their production possibilities. However, some companies cannot keep pace with competitors. Because leapfrogging does not appear to be present in selected industries (except for Milling), structural change is expected to occur in such a way that the most successful companies will strengthen their position.
This paper deals with an analysis of technological heterogeneity and technical efficiency in individual sectors of Czech agriculture after the EU enlargement in 2004. A parametric approach was used – Stochastic Frontier Analysis (SFA) to address the research questions. Specifically, it is employed the Random Parameter Model specification, in which sector dummies are used to capture the intersectoral as well as intrasectoral differences in technology. The results show there is significant heterogeneity among the studied sectors (i.e., combined, plant, animal and other production). The analysis showed that Capital and Material are being substituted more and more for Labour in all sectors, especially in animal production. This result is to be expected, as the technology in this sector is labour-saving. However, it was found out that land elasticity is quite low in plant production and combined production; since Land is a production factor that significantly determines the level of final output, this result is quite strange. One possible explanation may be the policy of distributing subsidies among farmers, when the land is kept but used in a more extensive way. The intrasectoral differences in technology are statistically significant for all inputs. Average technical efficiency is highest in other production and lowest in animal production, while it is approximately at the same level in plant production and combined production. It was discovered that diversification (combined production) of activities lowers the level of technical efficiency compared to specialisation (plant production), but on the other hand it does allow for alleviation of the negative impacts of specialization (animal production) by optimizing the production program. Finally, the analysis did confirm a statistically significant positive relationship between SAPS subsidies and technical efficiency. Organic farming has a negative impact on technical efficiency and the influence of labour force quality is positive. The statistical significance of TOP UP subsidies as well as the localization of the company to LFA have not been proved. ; Článek se zabývá analýzou technolocké heterogenity a technické efektivnosti jednotlivých sektorů českého zemědělství po vstupu České republiky do Evropské unie v roce 2004. Odpovědi na výzkumné otázky jsou hledány s využitím parametrického přístupu – analýzy stochatické hranice (SFA). Ve výzkumu byla aplikována specifikace modelu náhodných parametrů, do kterého jsou sektorové dummy proměnné zařazeny pro zohlednění intersektorových rozdílů v použité technologii. Výsledky ukazují na statisticky významnou heterogenitu mezi sledovanými sektory (tj. kombinovaná, rostlinná, živočišná a jiná produkce). Analýza prokázala, že práce je stále více nahrazována kapitálem a materiálem, a to ve všech sektorech – nejsignifikantněji pak v odvětví živočišné produkce. Tento výsledek je však očekávaný, jelikož technologie využívaná v daném sektoru je na práci úsporná. Dále bylo zjištěno, že v odvětví rostlinné a kombinované produkce je hodnota elasticity půdy oproti očekávání nízká – tento výsledek je zarážející, jelikož půda je produkční faktor významně determinující úroveň finální produkce. Jedním z možných vysvětlení je politika rozdělení podpor mezi farmáři, kdy půda je pak držena, avšak využívána spíše extensivním způsobem. Intrasektorové diference v technologii jsou statisticky významné ve všech sektorech pro všechny vstupy. Průměrná technická efektivnost dosahuje nejvyšší úrovně v odvětví ostatní produkce, zatímco nejnižší v odvětví živočišné produkce. Technická efektivnost odvětví rostlinné a kombinované produkce je na přibližně stejné úrovni. V rámci výzkumu bylo dále zjištěno, že diverzifikace aktivit (kombinovaná produkce) snižuje v porovnání se specializací (rostlinná produkce) úroveň technické efektivnosti. Na druhou stranu však umožňuje zmírnit negativní vliv specializace (živočišná produkce), a to optimalizací výrobního programu. V neposlední řadě analýza potvrdila statistickou významnost pozitivního vztahu mezi přímými platbami SAPS a technickou efektivností. Ekologické zemědělství má negativní vliv na technickou efektivnost a vliv motivace lidské práce je pozitivní. Statistická významnost přímých plateb TOP UP stejně tak jako lokalizace farmy v méně příznivých oblastech nebyla prokázána.
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This paper develops an estimation procedure to obtain consistent estimates of technology as represented by the input distance function, and to identify determinants of both transient and persistent technical inefficiency. The procedure accounts for two sources of potential endogeneity: (i) due to firm heterogeneity and (ii) due to simultaneity of input use decisions and technical efficiency. We employ this procedure to examine the effect of direct payments and farm size on the persistent and transient technical efficiency of French crop farms before and after the European Union´s Common Agricultural Policy decoupling reform of 2003. Our empirical results show that neither direct payments per hectare of utilized agricultural land nor farm size had any significant effect on the persistent component of farm technical efficiency in the considered periods. Neither of the two environmental variables explained the variation in the transient technical efficiency component in the period before decoupling. However, our model estimates suggest that larger farms might have experienced higher short-run adjustment costs in the process of adapting to the political and economic environment after the reform than their small and medium-sized counterparts.
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In: Environmental science and pollution research: ESPR, Band 28, Heft 35, S. 48942-48954
ISSN: 1614-7499
System dynamics and agent-based simulation modelling approaches have a potential as tools to evaluate the impact of policy related decision making in food value chains. The context is that a food value chain involves flows of multiple products, financial flows and decision making among the food value chain players. Each decision may be viewed from the level of independent actors, each with their own motivations and agenda, but responding to externalities and to the behaviours of other actors. The focus is to show how simulation modelling can be applied to problems such as fairness and power asymmetries in European food value chains by evaluating the outcome of interventions in terms of relevant operational indicators of interorganisational fairness (e.g., profit distribution, market power, bargaining power). The main concepts of system dynamics and agent-based modelling are introduced and the applicability of a hybrid of these methods to food value chains is justified. This approach is outlined as a research agenda, and it is demonstrated how cognitive maps can help in the initial conceptual model building when implemented for specific food value chains studied in the EU Horizon 2020 VALUMICS project. The French wheat to bread chain has many characteristics of food value chains in general and is applied as an example to formulate a model that can be extended to capture the functioning of European FVCs. This work is to be further progressed in a subsequent stream of research for the other food value chain case studies with different governance modes and market organisation, in particular, farmed salmon to fillet, dairy cows to milk and raw tomato to processed tomato.
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