Productivity effects of CAP investment support: Evidence from Sweden using matched panel data

This paper studies the effects of investment support from the common agricultural policy on labour and total factor productivity of agricultural firms in Sweden. Detailed firm-level data on 34 300 firms are used to estimate a matched panel model that relates firm productivity to a series of factors reflecting internal and external characteristics. The recently developed Coarsened Exact Matching method is used to estimate matched control groups and handle selection bias. Findings show a positive and significant treatment effect of investment support on firm productivity, but only for small firms. The analysis also reveals that an increase in the size of the support in relation to firm income has a negative and significant impact on productivity for all firms. Differentiating between various types of investment supports indicates heterogeneous treatment effects. The policy instrument can improve its efficiency if targeted to small firms and investments that have a link to public good provision.     

Women’s Labour Contribution to Productivity and Efficiency in Agriculture: Empirical Evidence From Bangladesh

This article examines the contribution of women’s labour input to productivity and efficiency in crop farming using a large survey dataset of 1,839 households from 16 villages in two agro‐ecological regions of Bangladesh. Results reveal that female labour accounts for a substantial 28% of total labour use (mainly supplied from the family) and contributes significantly to productivity as well as technical efficiency. Contrary to expectation, the cost share of female labour input is significantly higher than the male share, and has a substitution relationship with all other inputs, including male labour. The estimated mean level of technical efficiency is 0.90, implying that crop output might be increased by 10% by eliminating technical inefficiency. Both male and female education have a significant impact on improving technical efficiency. Other significant technical efficiency shifters are farming experience, family size and crop diversification. Owner operators are found to be technically inefficient relative to the tenants. Policy implications include creation of a hired labour market for female labour so that more women can be involved in the production process, and can contribute to towards improving productivity and efficiency. In addition, investment in education for both men and women, strategies to promote crop diversification and effective regulation/modification of the tenancy market will significantly improve technical efficiency in this case.     

What do Agricultural Income and Productivity Measurements Really Mean?

Statistical data on labour productivity and income in agriculture reveal large discrepancies between various EC member states, both with respect to their absolute levels and in relation to non-farm productivity and income in the respective countries. Insofar as they appear to reflect the failure of markets in allocating agricultural resources efficiently, and seem to be inconsistent with conventional wisdom concerning structural adjustment of agriculture, however, it can be seen that those data are misleading to a large extent. Based on a simple model of optimal time allocation between farm and non-farm activities of members of farm households, it is demonstrated that farm labour productivity and income must be different according to differences in the relation of farm to non-farm labour supply. The implications concerning international, interregional, intersectoral and intertemporal comparisons of income and productivity are discussed as well as the relevance of market failure in agriculture.     

Productivity and Structural Heterogeneity in the Brazilian Manufacturing Sector: Trends and Determinants

Structural heterogeneity (SH)—i.e. the existence of marked asymmetries in labour productivity among firms, along with low-productivity firms forming a large share of total employment—plays an important role in development theory. But only recently has the availability of micro data made the rigorous measuring of SH possible. This paper makes compatible different databases on manufacturing production, innovation and micro-social data for Brazil—PIA, RAIS, Secex and PINTEC—for 2000–2008 in order to measure SH and analyse its determinants. First, productivity groups are formed out of the universe of Brazilian manufacturing firms using a k-mean cluster methodology. Second, the variables affecting the productivity group to which each firm belongs are tested using an ordered probit model. The results indicate that increasing returns (captured by the firm's market share, the number of employees in innovative activities, workers' years of schooling and the accumulation of workers' experience), the technological intensity of the industry, learning by exporting and public support to R&D have driven productivity growth and reproduced SH through time, as predicted by development and evolutionary theories.     

Productivity and Environmental Performance in Marketing Cooperatives: An Analysis of the Spanish Horticultural Sector

The paper analyses the productivity of marketing cooperatives incorporating environmental inputs/outputs. In the European agriculture, expectations for attaining sustainable and competitive agriculture rely to a great extent on the cooperative sector's ability to adapt to new market conditions. These challenges have led marketing cooperatives in the fruit and vegetables sector to consider improvements in productivity and sound environmental performance. The study analyses the total factor productivity related to environmental variables in this sector using a parametric‐stochastic approach and panel data on Spanish cooperatives over the period 1994–2002. Additionally, the determinants of environmental productivity are examined econometrically. The estimates obtained show an increase in efficiency for the period under study and a relationship between productivity changes and management factors, such as labour quality, capital intensity and environmental spillover.     

Botswana: Poverty amid plenty

This paper uses the technological capabilities framework for examining differences in technological intensities and economic performance between foreign and local food and beverage, and textile and garment firms and metal engineering firms in Kenya. Foreign firms had statistically significant higher labour productivity means than local firms in textile and garment manufacturing. Foreign firms were also more export- and technology-intensive than local firms in textile and garment (process technology and R&D) and metal engineering (HR). Foreign firms had higher and statistically significant skills and overall technology (TI) means than local firms in food and beverages. The econometric exercise showed that foreign ownership had a statistically significant and positive relationship with overall technological and HR intensities. In labour productivity, the coefficient of TI was higher in the foreign firms' sample than in the local firms' sample. Local firms had higher value added in domestic than export markets. Export intensity had a positive relationship in the process technology regressions, but an inverse relationship in the HR regressions in the foreign firms' sample. Overall, the statistically significant results suggest that foreign firms' technology, productivity and export intensity levels in economies with weak institutions tend to be superior to local firms.     

Considering Technical and Allocative Efficiency in the Inverse Farm Size–Productivity Relationship

In the leading explanations for the oft‐observed inverse relationship (IR) between farm size and productivity in developing country agriculture, labour market imperfections have commonly occupied a central role. However, an emerging literature suggests that disparities in technical or allocative efficiency may be driving productivity differentials. Using nationally‐representative panel data from Nicaragua, we develop and employ a four‐stage empirical framework to simultaneously test the competing explanations for the IR. While efficiency differences exert a significant impact on all productivity indicators, their explanatory power is insufficient to rule out labour market imperfections as the driving force behind the relationship.     

Input‐Specific Dynamic Productivity Change: Measurement and Application to European Dairy Manufacturing Firms

We propose a new method for measuring and decomposing input‐specific productivity change in a dynamic context. The resulting input‐specific dynamic Luenberger productivity change indicator is decomposed to identify the contributions of input‐specific dynamic technical, technical inefficiency and scale inefficiency changes. The empirical application of the paper focuses on panel data of large firms in the European dairy processing industry over the period 2005–2012. The results show similar patterns for dynamic input‐specific productivity change and its components for labour across European regions (Eastern, Western and Southern), while differences between regions are found regarding materials and investments.     

Agribusiness,Peasant Agriculture and Labour Markets: Ecuador in Comparative Perspective

The consolidation of capitalist agriculture in countries such as Ecuador has led to a recent revaluation of territories (central highlands) where cheap labour has facilitated agribusiness development linked to the world market. This process generates growth in the numbers of rural wage workers and the creation of a labour market that, in relation to others in several Latin American countries, has certain particularities: permanent jobs, gender balance, an absence of intermediaries and low levels of precariousness. Small‐scale peasant producers are marginalized in this context and play functional roles within the current dynamics of agribusiness firms. The organizational weakness of rural wage earners and the pursuit of clientelist relationships by firms do not allow rural workers and local communities to devise economic and social strategies that might improve their position in this ‘field of forces’ in the territory.     

Land size and productivity in the livestock sector: evidence from pastoral areas in China

This article explores the relationship between land size and productivity in the livestock sector. Household panel data from pastoral areas in northwestern China were analysed. Results suggest an inverse relationship (IR) between land size and the number of livestock per ha. IR can be largely explained by labour input intensity, which is negatively correlated with land size. We find that household’s labour demand is not separable from household’s labour supply and households’ decisions to rent land and hire labour for grazing are significantly related to the labour–land endowment ratio. These findings are consistent with the Chayanovian explanation that labour input intensity varies with farm size due to unobserved interhousehold variation in shadow wage rates. In addition, participation in the labour market does not significantly influence the IR for the employer, while the practice of land renting reduces, but does not eliminate, the IR for the lease. These findings point towards the potential for using factor markets to optimise pasture‐based livestock production scale, and the need to promote the factor market development to achieve efficiency in resource use.     

Agriculture: a case study in industrial relations reform

Organised Australian labour first demonstrated its power in the shearing industry just over 100 years ago. The system of arbitration developed over the last century continues to have a profound impact on agriculture. This article profiles the Australian rural labour market and identifies some continuing regulatory impediments to the proper functioning of the rural labour market. A brief review of the links between agriculture and other industries in Australia concludes that the greatest improvement in farm profitability from a better functioning labour market is to be had from productivity increases in industries outside the farm gate.     

Labour Market Effects of a Female Stipend Programme in Bangladesh

Bangladesh's female secondary education stipend programme was one of the first conditional cash transfer programmes in the world. While numerous studies have investigated the impacts of such programmes on school enrolment, attendance and learning, less attention has been paid to their long-term labour market effects. This article extends the literature by studying the effects of Bangladesh's programme on earnings and the sector of employment, as well as on labour force participation and education outcomes, using repeated cross-sectional data in a difference-in-difference framework. We find that exposure to 5 years of the programme is be associated with a 1-year increase in education level completed and an increase in female labour force participation by six percentage points. However, we find that wages decrease by about 17% because the women have difficulties in finding a good job and end up in low productivity self-employment work.     

Complementarity between In-house R&D and Technology Purchasing: Evidence from Chinese Manufacturing Firms

In order to catch up with the current technological frontier, firms, especially in developing countries, try to acquire technological advancement through internal R&D efforts, as well as through external technology-sourcing activities. This study tests whether these two sources of technology acquisition are complements or substitutes for each other in small- and medium-sized Chinese manufacturing firms. The evidence that we present shows some signs of complementarity between the two sources of knowledge in reaching a higher unconditional intensity of product innovation for firms with 100–300 employees and, in general, a significant degree of substitutability between them in achieving higher levels of labour productivity.     

Imported Intermediate Inputs and Firms’ Productivity Growth: Evidence from the Food Industry

Imported goods play a central role in determining the gains from trade. Using detailed trade and firm‐level data for Italy and France, we investigate the relationship between trade integration, imported intermediate inputs and firm performance in the food industry. Our main findings show that an increase in import competition spurs firm‐level productivity growth. Furthermore, the productivity growth effect attributable to imported intermediate inputs is significantly stronger than the effect due to imported final products. In addition, we find that new imported inputs are of particular importance, especially for Italian food firms, though less so for the French firms. Finally, the productivity growth effect of trade integration tends to be asymmetric across firms: more productive firms gain more from trade integration. These stylised facts have interesting policy implications.     

The impact of the 2008 financial crisis on dynamic productivity growth of the Spanish food manufacturing industry. An impulse response analysis

The emergence of a financial crisis is an event that can impact the fortunes of nearly all economic agents. The focus here is on the 2008 financial crisis and how firms’ productivity growth was impacted by this crisis in the years that followed. This article focuses on dynamic productivity growth and its components using a firm‐level data set of Spanish meat processing, dairy processing, and oils and fats firms. The impulse response analysis shows that the impact of the crisis on dynamic productivity growth is negative and persistent in the oils and fats industry, initially positive but then negative in the meat processing industry, and positive in the dairy processing industry. The observed magnitudes of change in indicator are between 2% and 5% for oils and fats industries, and of 1% in both dairy and meat industries. Our analysis further confirms that firms’ size is an important factor in explaining how crisis impacts dynamic productivity growth and its components, while we find only slight evidence regarding the firms’ experience in the market.     

Foreign Direct Investment and the Performance of European Agribusiness Firms

This article analyses the relationship between foreign direct investment and the performance of European agribusiness firms. Motivated by the role of heterogeneous firms in new trade theory and using a firm‐level dataset, statistical analyses identify key differences between firms investing in foreign economies and those that do not. A binary choice model quantifies the relationship between firm characteristics and the decision to engage in foreign investment. Size and – less strongly – productivity are greater for multinationals relative to domestic firms. Furthermore, European multinationals are characterised by a larger debt to equity ratio and show lower labour and input costs.     

PRODUCTIVITY GROWTH IN AGRICULTURE (REVISITED): A MEASUREMENT FRAMEWORK AND SOME EMPIRICAL RESULTS

This paper explores the methodology of sectoral productivity growth measurement within the framework of input-output analysis. A method which ensures that sectoral productivity growth rates are consistent with productivity growth rates for the economy as a whole (as well as allowing for external trade) is suggested. New estimates are presented on total factor productivity in UK agriculture using a Tornqvist index procedure. In addition, new estimates of agricultural labour productivity growth are presented, taking account not only of labour employed in agriculture but also of labour employed in ancillary industries on the supply side. The empirical results confirm that part of the labour previously employed on farms has shifted “upstream” to industries providing agriculture with fertilises, machinery and other inputs.     

Market Imperfections and Land Productivity in the Ethiopian Highlands

This study analyses how market imperfections affect land productivity in a degraded low‐potential cereal‐livestock economy in the Ethiopian highlands. A wide array of variables is used to control for land quality in the analysis. Results of three different selection models were compared with least squares models using the HC3 heteroskedasticity‐consistent covariance matrix estimator. Market imperfections in labour and land markets were found to affect land productivity. Land productivity was positively correlated with household male and female labour force per unit of land. Female‐headed households achieved much lower land productivity than male‐headed households. Old age of household heads was also correlated with lower land productivity. Imperfections in the rental market for oxen appeared to cause overstocking of oxen by some households. Conservation technologies had no significant positive short‐run effect on land productivity. The main results were consistent across the different econometric models.     

An equilibrium displacement approach to oligopoly market analysis: an application to trade in the Korean infant formula market

This article uses an equilibrium displacement model (EDM) to assess the impact of a change in trade policy in the Korean infant formula market that is assumed to be oligopolistic. Domestic oligopolists compete in a market for a homogenous good with importing firms who enjoy the same level of market power as the domestic producers. Within an EDM framework, we investigate how the market adjusts to a new equilibrium in response to an external policy shock that improves access to foreign goods. Our empirical work consists of two steps. We first econometrically estimate the market demand elasticity and market power parameter. Then, using these estimates, we simulate our EDM model to assess the distributional effects of tariff cuts and other changes in marginal cost. Simulation results show that, with a lower market price and increased consumption, the change in consumer surplus resulting from tariff reduction is unambiguously positive, but that the change in social welfare can be in either direction, depending on who receives market rents associated with imports. When importing firms are domestic, the domestic welfare change is definitely positive. However, in the case of foreign importing firms, the direction of the welfare change crucially depends on the demand elasticity.     

Impacts of price and productivity changes on banana‐growing households in Uganda

This article compares the effects of changing market prices and farm productivity on the welfare of banana‐growing households in the Ntungamo district of Uganda. A heterogeneous‐agent model is applied via a series of mathematical optimization problems, to simulate production and consumption responses of 70 farm households surveyed in 2006. Results show that a given increase in productivity has a greater impact on poverty alleviation than that same increase in market prices. Despite the effects of productivity gains being comparable across different types of household groups, price improvements primarily benefit the incomes of households who are involved in rural producer organizations, who are located closer to markets, and who sell at the market.