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Agricultural cooperative membership and technical efficiency of apple farmers in China: An analysis accounting for selectivity bias

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  • Ma, Wanglin
  • Renwick, Alan
  • Yuan, Peng
  • Ratna, Nazmun

Abstract

This study examines the impact of agricultural cooperative membership on technical efficiency (TE) of apple farmers in China. We make novel contributions to the literature by employing a recently developed selectivity-corrected stochastic production frontier model with propensity score matching to address possible self-selection biases stemming from both observable and unobservable factors. The empirical results show that TE for cooperative members ranges from 79 to 86 per cent and that for non-members ranges from 74 to 84 per cent, depending on how biases are controlled. In addition, the efficiency levels of both members and non-members of cooperatives appear to be underestimated if the selectivity bias is not appropriately addressed. Our findings conclude that the average TE is consistently higher for cooperative members relative to their counterparts, highlighting the positive role of contemporary agricultural cooperatives in promoting efficient usage of production inputs.

Suggested Citation

  • Ma, Wanglin & Renwick, Alan & Yuan, Peng & Ratna, Nazmun, 2018. "Agricultural cooperative membership and technical efficiency of apple farmers in China: An analysis accounting for selectivity bias," Food Policy, Elsevier, vol. 81(C), pages 122-132.
    • Handle: RePEc:eee:jfpoli:v:81:y:2018:i:c:p:122-132
    DOI: 10.1016/j.foodpol.2018.10.009
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    More about this item

    Keywords

    Agricultural cooperative; Technical efficiency; Stochastic production frontier; Propensity score matching; Selectivity correction; China;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • J54 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Producer Cooperatives; Labor Managed Firms
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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