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Examining the Relationship between Social Inefficiency and Financial Performance. Evidence from Wisconsin Dairy Farms

Author

Listed:
  • Theodoros Skevas

    (Division of Applied Social Sciences, University of Missouri, 124 Mumford Hall, Columbia, MO 65211, USA)

  • Ioannis Skevas

    (Department of Food Business & Development, University College Cork, O’Rahilly Building, College Rd, T12 K8AF Cork, Ireland)

  • Victor E. Cabrera

    (Department of Animal and Dairy Sciences, University of Wisconsin, 1675 Observatory Dr., 434 Animal Sciences Building Madison, Madison, WI 53706, USA)

Abstract

Although social sustainability is an important component of sustainable agricultural production, little research has been conducted to assess social sustainability performance at the farm level. This study measures farmers’ social sustainability performance using (in)efficiency measures derived from a non-parametric dynamic directional distance function approach. It further examines the relationship between social (in)efficiency and financial performance measured by profitability, which is crucial to understand the financial impact of engaging in socially responsible activities. The empirical application focuses on a sample of Wisconsin dairy farms over the period 2007–2017. Results show that sample farms could have (decreased/)increased their social (in)efficiency by an average of 14%. Social (in)efficiency was found to be (negatively/)positively related to farm profitability, implying that social objectives can be achieved in tandem with economic goals.

Suggested Citation

  • Theodoros Skevas & Ioannis Skevas & Victor E. Cabrera, 2021. "Examining the Relationship between Social Inefficiency and Financial Performance. Evidence from Wisconsin Dairy Farms," Sustainability, MDPI, vol. 13(7), pages 1-14, March.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:7:p:3635-:d:523776
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    References listed on IDEAS

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    Cited by:

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    3. Skevas, Theodoros & Martinez-Palomares, Jorge C., 2023. "Technology heterogeneity and sustainability efficiency: Empirical evidence from Peruvian coffee production," European Journal of Operational Research, Elsevier, vol. 310(3), pages 1192-1200.

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