IDEAS home Printed from https://ideas.repec.org/a/bla/jageco/v48y1997i1-3p151-166.html
   My bibliography  Save this article

Internal And External Scale Effects In Productivity Analysis: A Dynamic Dual Approach

Author

Listed:
  • Panos Fousekis

Abstract

The theoretical and empirical significance of external factors for the productive performance of a private firm has been the focus of a rapidly increasing body of literature. This paper offers a way to adjust the traditional Tornqvist‐Theil index of Total Factor Productivity (TFP) growth for public infrastructure as a source of external scale effects. This is achieved through a dynamic profit maximisation model which allows us to distinguish between internal and external scale effects and technical change effects. An application of this model to the agricultural sector in Greece indicates that public infrastructure in the sector has worked towards raising producers' profits. Decomposition of TFP growth into technical change, internal scale and external scale effects suggests that not accounting for the role of public infrastructure results in over‐stating TFP growth in the sector.

Suggested Citation

  • Panos Fousekis, 1997. "Internal And External Scale Effects In Productivity Analysis: A Dynamic Dual Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1‐3), pages 151-166, January.
    • Handle: RePEc:bla:jageco:v:48:y:1997:i:1-3:p:151-166
    DOI: 10.1111/j.1477-9552.1997.tb01142.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1477-9552.1997.tb01142.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1477-9552.1997.tb01142.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    2. C. Thirtle & P. Bottomley, 1992. "Total Factor Productivity In Uk Agriculture, 1967‐90," Journal of Agricultural Economics, Wiley Blackwell, vol. 43(3), pages 381-400, September.
    3. Utpal Vasavada & Robert G. Chambers, 1986. "Investment in U.S. Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(4), pages 950-960.
    4. Ramon E. Lopez, 1985. "Supply Response and Investment in the Canadian Food Processing Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(1), pages 40-48.
    5. Glass, J C & McKillop, D G, 1990. "Production Interrelationships and Productivity Measurement in Irish Agriculture," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 17(3), pages 271-287.
    6. Nadiri, M Ishaq & Mamuneas, Theofanis P, 1994. "The Effects of Public Infrastructure and R&D Capital on the Cost Structure and Performance of U.S. Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 22-37, February.
    7. Garcia-Mila, Teresa & McGuire, Therese J., 1992. "The contribution of publicly provided inputs to states' economies," Regional Science and Urban Economics, Elsevier, vol. 22(2), pages 229-241, June.
    8. Morrison, Catherine J, 1985. "Primal and Dual Capacity Utilization: An Application to Productivity Measurement in the U.S. Automobile Industry," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(4), pages 312-324, October.
    9. Larry G. Epstein, 1981. "Duality Theory and Functional Forms for Dynamic Factor Demands," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 48(1), pages 81-95.
    10. Chambers, Robert G. & Lopez, Ramon E., 1984. "A General, Dynamic, Supply-Response Model," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 13(2), pages 1-13, October.
    11. Epstein, Larry G & Denny, Michael G S, 1983. "The Multivariate Flexible Accelerator Model: Its Empirical Restrictions and an Application to U.S. Manufacturing," Econometrica, Econometric Society, vol. 51(3), pages 647-674, May.
    12. Diane P. Dupont, 1991. "Testing for Input Substitution in a Regulated Fishery," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(1), pages 155-164.
    13. Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
    14. Diewert, W Erwin, 1978. "Superlative Index Numbers and Consistency in Aggregation," Econometrica, Econometric Society, vol. 46(4), pages 883-900, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Melfou, Katerina & Papanagiotou, Evangelos, 2003. "Total Factor Productivity Adjusted for a Detrimental Input," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 4(2), pages 1-14, August.
    2. Panos Fousekis, 1999. "Temporary Equilibrium, Full Equilibrium, and Elasticity of Cost," Journal of Productivity Analysis, Springer, vol. 11(1), pages 43-54, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eswaramoorthy, K., 1991. "U.S. livestock production and factor demand: a multiproduct dynamic dual approach," ISU General Staff Papers 1991010108000010523, Iowa State University, Department of Economics.
    2. Panos Fousekis & Aspasia Papakonstantinou, 1997. "Economic Capacity Utilisation And Productivity Growth In Greek Agriculture," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1‐3), pages 38-51, January.
    3. Alejandro Onofri & Lilyan E. Fulginiti, 2005. "Public Inputs and Productivty in the Agricultural Sector: A Dynamic Dual Approach," Others 0502011, University Library of Munich, Germany.
    4. Buhr, Brian L. & Kim, Hanho, 1997. "Dynamic adjustment in the US beef market with imports," Agricultural Economics, Blackwell, vol. 17(1), pages 21-34, October.
    5. Onofri, Alejandro & Fulginiti, Lilyan E., 2001. "Public Inputs and Endogenous Growth in the Agricultural Sector: a Dynamic Dual Approach," 2001 Annual meeting, August 5-8, Chicago, IL 20438, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Good, D. & Nadiri, M.I. & Sickles, R., 1996. "Index Number and Factor Demand Approaches to the Estimarion of Productivity," Working Papers 96-34, C.V. Starr Center for Applied Economics, New York University.
    7. Alfons Oude Lansink & Spiro Stefanou, 2001. "Dynamic Area Allocation and Economies of Scale and Scope," Journal of Agricultural Economics, Wiley Blackwell, vol. 52(3), pages 38-52, September.
    8. Agbola, Frank W., 2005. "Optimal intertemporal investment in Australian agriculture: An empirical investigation," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 6(2), pages 1-11.
    9. Alejandro Onofri & Lilyan Fulginiti, 2008. "Public inputs and dynamic producer behavior: endogenous growth in U.S. agriculture," Journal of Productivity Analysis, Springer, vol. 30(1), pages 13-28, August.
    10. Warjiyo, Perry & Huffman, Wallace E., 1997. "Dynamic input demand functions and resource adjustment for US agriculture: state evidence," Agricultural Economics, Blackwell, vol. 17(2-3), pages 223-237, December.
    11. Andrés Rodríguez-Pose & Yannis Psycharis & Vassilis Tselios, 2012. "Public investment and regional growth and convergence: Evidence from Greece," Papers in Regional Science, Wiley Blackwell, vol. 91(3), pages 543-568, August.
    12. William F. Fox & Sanela Porca, 2001. "Investing in Rural Infrastructure," International Regional Science Review, , vol. 24(1), pages 103-133, January.
    13. CARPENTIER, Alain & GOHIN, Alexandre & SCKOKAI, Paolo & THOMAS, Alban, 2015. "Economic modelling of agricultural production: past advances and new challenges," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 96(01), March.
    14. Alfredo M. Pereira & Jorge M. Andraz, 2013. "On The Economic Effects Of Public Infrastructure Investment: A Survey Of The International Evidence," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 38(4), pages 1-37, December.
    15. Andreas Kopp, 2005. "Aggregate Productivity Effects of Road Investment - A Reassessment for Western Europe," ERSA conference papers ersa05p631, European Regional Science Association.
    16. Georganta, Zoe, 1997. "The effect of a free market price mechanism on total factor productivity: The case of the agricultural crop industry in Greece," International Journal of Production Economics, Elsevier, vol. 52(1-2), pages 55-71, October.
    17. Chandra, Amitabh & Thompson, Eric, 2000. "Does public infrastructure affect economic activity?: Evidence from the rural interstate highway system," Regional Science and Urban Economics, Elsevier, vol. 30(4), pages 457-490, July.
    18. Krasachat, W. & Coelli, T. J., 1995. "Dynamics of Agricultural Production on Thailand," 1995 Conference (39th), February 14-16, 1995, Perth, Australia 170898, Australian Agricultural and Resource Economics Society.
    19. Onofri, Alejandro & Fulginiti, Lilyan E., 1999. "Public Capital, R&D, Agricultural Production And Endogenous Growth," 1999 Annual meeting, August 8-11, Nashville, TN 21542, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    20. Alan de Brauw & Jikun Huang & Scott Rozelle, "undated". "Sequencing and the Success of Gradualism: Empirical Evidence from China's Agricultural Reform," Center for Development Economics 173, Department of Economics, Williams College.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jageco:v:48:y:1997:i:1-3:p:151-166. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0021-857X .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.