IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i16p12169-d1213492.html
   My bibliography  Save this article

Agriculture’s Efficiency in the Context of Sustainable Agriculture—A Benchmarking Analysis of Financial Performance with Data Envelopment Analysis and Malmquist Index

Author

Listed:
  • Nicolae Bobitan

    (Accounting and Auditing Department, Faculty of Economics and Business Administration, West University of Timisoara, 300223 Timisoara, Romania)

  • Diana Dumitrescu

    (Accounting and Auditing Department, Faculty of Economics and Business Administration, West University of Timisoara, 300223 Timisoara, Romania)

  • Valentin Burca

    (Accounting and Auditing Department, Faculty of Economics and Business Administration, West University of Timisoara, 300223 Timisoara, Romania)

Abstract

Climate change, increased government efforts towards sustainable economic growth, and all types of resource constraint have raised concern among academics and practitioners about the path to follow for keeping firms’ competitive advantage in such a dynamic environment. The purpose of the paper is to explore how firms operating in the agricultural sector have understood the need to identify and follow the best practitioners in the market, performing a benchmarking analysis aimed at providing insights on firms’ financial sustainability. As the literature has not sufficiently addressed the problem of firms’ financial sustainability operating in the Romanian Agriculture sector, we provide some empirical evidence related to the before and post-pandemic periods. The benchmarking analysis is developed using the Data Envelopment Analysis (DEA) method, which measures firms’ efficiency in terms of financial performance. Overall, the results suggest there is still much work to be done, and firms operating in the agricultural sector show high variation in terms of productivity from the perspective of financial indicators. The results are even more relevant in the context of the current COVID-19 pandemic, showing that only a part of the firms analyzed have developed their own dynamic capabilities that help them effectively find solutions to adjusting to the volatility of the market in a short timeframe.

Suggested Citation

  • Nicolae Bobitan & Diana Dumitrescu & Valentin Burca, 2023. "Agriculture’s Efficiency in the Context of Sustainable Agriculture—A Benchmarking Analysis of Financial Performance with Data Envelopment Analysis and Malmquist Index," Sustainability, MDPI, vol. 15(16), pages 1-27, August.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:16:p:12169-:d:1213492
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/16/12169/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/16/12169/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Danilo Bertoni & Daniele Cavicchioli & Franco Donzelli & Giovanni Ferrazzi & Dario G. Frisio & Roberto Pretolani & Elena Claire Ricci & Vera Ventura, 2018. "Recent Contributions of Agricultural Economics Research in the Field of Sustainable Development," Agriculture, MDPI, vol. 8(12), pages 1-20, December.
    2. Cristina Chifor & Iulia D. Arion & Vlad I. Isarie & Felix H. Arion, 2022. "A Systematic Literature Review on European Food Quality Schemes in Romania," Sustainability, MDPI, vol. 14(23), pages 1-16, December.
    3. Normansyah Syahruddin & Matteo Kalchschmidt, 2012. "Sustainable supply chain management in the agricultural sector: a literature review," International Journal of Engineering Management and Economics, Inderscience Enterprises Ltd, vol. 3(3), pages 237-258.
    4. Dethier, Jean-Jacques & Effenberger, Alexandra, 2012. "Agriculture and development: A brief review of the literature," Economic Systems, Elsevier, vol. 36(2), pages 175-205.
    5. Jaime K. Manning & Amy Cosby & Deborah Power & Eloise S. Fogarty & Bobby Harreveld, 2022. "A Systematic Review of the Emergence and Utilisation of Agricultural Technologies into the Classroom," Agriculture, MDPI, vol. 12(6), pages 1-18, June.
    6. Maria G. Lampridi & Claus G. Sørensen & Dionysis Bochtis, 2019. "Agricultural Sustainability: A Review of Concepts and Methods," Sustainability, MDPI, vol. 11(18), pages 1-27, September.
    7. Justas Streimikis & Mahyar Kamali Saraji, 2022. "Green productivity and undesirable outputs in agriculture: a systematic review of DEA approach and policy recommendations," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 35(1), pages 819-853, December.
    8. Ahmad Bathaei & Dalia Štreimikienė, 2023. "A Systematic Review of Agricultural Sustainability Indicators," Agriculture, MDPI, vol. 13(2), pages 1-19, January.
    9. Beata Kalinowska & Piotr Bórawski & Aneta Bełdycka-Bórawska & Bogdan Klepacki & Aleksandra Perkowska & Tomasz Rokicki, 2022. "Sustainable Development of Agriculture in Member States of the European Union," Sustainability, MDPI, vol. 14(7), pages 1-21, March.
    10. Sarah Hackfort, 2021. "Patterns of Inequalities in Digital Agriculture: A Systematic Literature Review," Sustainability, MDPI, vol. 13(22), pages 1-18, November.
    11. Tim J. Coelli & D. S. Prasada Rao, 2005. "Total factor productivity growth in agriculture: a Malmquist index analysis of 93 countries, 1980–2000," Agricultural Economics, International Association of Agricultural Economists, vol. 32(s1), pages 115-134, January.
    12. Kulawik, Jacek, 2010. "Financial Efficiency in Agriculture: the Essence, Measurement and Perspectives," Problems of Agricultural Economics / Zagadnienia Ekonomiki Rolnej 205137, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
    13. Sarah Velten & Julia Leventon & Nicolas Jager & Jens Newig, 2015. "What Is Sustainable Agriculture? A Systematic Review," Sustainability, MDPI, vol. 7(6), pages 1-33, June.
    14. Laura Brad & Gabriel Popescu & Alina Zaharia & Maria Claudia Diaconeasa & Daniela Mihai, 2018. "Exploring the Road to Agricultural Sustainability by Assessing the EU Debt Influencing Factors," Sustainability, MDPI, vol. 10(7), pages 1-46, July.
    15. Alexander Zorn & Michele Esteves & Ivo Baur & Markus Lips, 2018. "Financial Ratios as Indicators of Economic Sustainability: A Quantitative Analysis for Swiss Dairy Farms," Sustainability, MDPI, vol. 10(8), pages 1-20, August.
    16. Jessica Breaugh & Keegan McBride & Moritz Kleinaltenkamp & Gerhard Hammerschmid, 2021. "Beyond Diffusion: A Systematic Literature Review of Innovation Scaling," Sustainability, MDPI, vol. 13(24), pages 1-21, December.
    17. Vera Sadovska & Lena Ekelund Axelson & Cecilia Mark-Herbert, 2020. "Reviewing Value Creation in Agriculture—A Conceptual Analysis and a New Framework," Sustainability, MDPI, vol. 12(12), pages 1-22, June.
    18. Boris Bravo-Ureta & Daniel Solís & Víctor Moreira López & José Maripani & Abdourahmane Thiam & Teodoro Rivas, 2007. "Technical efficiency in farming: a meta-regression analysis," Journal of Productivity Analysis, Springer, vol. 27(1), pages 57-72, February.
    19. Kao, Chiang, 2017. "Measurement and decomposition of the Malmquist productivity index for parallel production systems," Omega, Elsevier, vol. 67(C), pages 54-59.
    20. Tsaples, G. & Papathanasiou, J., 2021. "Data envelopment analysis and the concept of sustainability: A review and analysis of the literature," Renewable and Sustainable Energy Reviews, Elsevier, vol. 138(C).
    21. Christina-Ioanna Papadopoulou & Efstratios Loizou & Fotios Chatzitheodoridis, 2022. "Priorities in Bioeconomy Strategies: A Systematic Literature Review," Energies, MDPI, vol. 15(19), pages 1-15, October.
    22. Abdallah Alaoui & Lúcia Barão & Carla S. S. Ferreira & Rudi Hessel, 2022. "An Overview of Sustainability Assessment Frameworks in Agriculture," Land, MDPI, vol. 11(4), pages 1-26, April.
    23. Halkos, George & Petrou, Kleoniki Natalia, 2019. "Treating undesirable outputs in DEA: A critical review," Economic Analysis and Policy, Elsevier, vol. 62(C), pages 97-104.
    24. Franz Grossauer & Gernot Stoeglehner, 2023. "Bioeconomy—A Systematic Literature Review on Spatial Aspects and a Call for a New Research Agenda," Land, MDPI, vol. 12(1), pages 1-22, January.
    25. Ruomei Xu & Yanrui Wu & Chen Chen, 2022. "Agricultural green efficiency and productivity incorporating waste recycling," Australian Economic Papers, Wiley Blackwell, vol. 61(3), pages 635-660, September.
    26. Bakhtmina Zia & Muhammad Rafiq & Shahab E. Saqib & Muhammad Atiq, 2022. "Agricultural Market Competitiveness in the Context of Climate Change: A Systematic Review," Sustainability, MDPI, vol. 14(7), pages 1-22, March.
    Full references (including those not matched with items on IDEAS)

    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. Scheierling, Susanne M. & Treguer, David O. & Booker, James F. & Decker, Elisabeth, 2014. "How to assess agricultural water productivity ? looking for water in the agricultural productivity and efficiency literature," Policy Research Working Paper Series 6982, The World Bank.
    2. Leonidas Sotirios Kyrgiakos & Georgios Kleftodimos & George Vlontzos & Panos M. Pardalos, 2023. "A systematic literature review of data envelopment analysis implementation in agriculture under the prism of sustainability," Operational Research, Springer, vol. 23(1), pages 1-38, March.
    3. Christina-Ioanna Papadopoulou & Efstratios Loizou & Fotios Chatzitheodoridis & Anastasios Michailidis & Christos Karelakis & Yannis Fallas & Aikaterini Paltaki, 2023. "What Makes Farmers Aware in Adopting Circular Bioeconomy Practices? Evidence from a Greek Rural Region," Land, MDPI, vol. 12(4), pages 1-17, April.
    4. Chenghan Guo & Rong Zhang & Yuntao Zou, 2023. "The Efficiency of China’s Agricultural Circular Economy and Its Influencing Factors under the Rural Revitalization Strategy: A DEA–Malmquist–Tobit Approach," Agriculture, MDPI, vol. 13(7), pages 1-26, July.
    5. Ioannis E. Tsolas, 2023. "Efficiency Measurement of Lignite-Fired Power Plants in Greece Using a DEA-Bootstrap Approach," Sustainability, MDPI, vol. 15(4), pages 1-10, February.
    6. Ma, Shuzhong & Feng, Han, 2013. "Will the decline of efficiency in China's agriculture come to an end? An analysis based on opening and convergence," China Economic Review, Elsevier, vol. 27(C), pages 179-190.
    7. Teerajet Chaiyason & Juckamas Laohavanich & Suphan Yangyuen & Cherdpong Chiawchanwattana & Nisanath Kaewwinud & Nirattisak Khongthon & Siwa Kaewplang & Jurawan Nontapon & Anongrit Kangrang, 2023. "Accepted Guidelines on the Potential of Water Budgets for Solving Droughts: A Case Study of Chum Saeng Sub-District, Satuek District, Buri Ram Province, Thailand," Sustainability, MDPI, vol. 15(10), pages 1-17, May.
    8. Güner, Samet & Cebeci, Halil İbrahim & Antunes, Jorge Junio Moreira & Wanke, Peter F., 2021. "Sustainable efficiency drivers in Eurasian airports: Fuzzy NDEA approach based on Shannon's entropy," Journal of Air Transport Management, Elsevier, vol. 92(C).
    9. Evagelia Koutridi & Dimitrios Tsiotas & Olga Christopoulou, 2023. "Examining the Spatial Effect of “Smartness” on the Relationship between Agriculture and Regional Development: The Case of Greece," Land, MDPI, vol. 12(3), pages 1-22, February.
    10. Ahmad Bathaei & Dalia Štreimikienė, 2023. "A Systematic Review of Agricultural Sustainability Indicators," Agriculture, MDPI, vol. 13(2), pages 1-19, January.
    11. Lindikaya W. Myeki & Nicolette Matthews & Yonas T. Bahta, 2023. "Decomposition of Green Agriculture Productivity for Policy in Africa: An Application of Global Malmquist–Luenberger Index," Sustainability, MDPI, vol. 15(2), pages 1-17, January.
    12. Ionuț-Adrian Drăguleasa & Amalia Niță & Mirela Mazilu & Gheorghe Curcan, 2023. "Spatio-Temporal Distribution and Trends of Major Agricultural Crops in Romania Using Interactive Geographic Information System Mapping," Sustainability, MDPI, vol. 15(20), pages 1-25, October.
    13. Scheierling, S. M., 2014. "How to assess agricultural water productivity?: looking for water in the agricultural productivity and efficiency literature," IWMI Working Papers H046876, International Water Management Institute.
    14. Daniel Solís & Boris E. Bravo‐Ureta & Ricardo E. Quiroga, 2009. "Technical Efficiency among Peasant Farmers Participating in Natural Resource Management Programmes in Central America," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(1), pages 202-219, February.
    15. Almeida, Alexandre N. & Bravo-Ureta, Boris E., 2019. "Agricultural productivity, shadow wages and off-farm labor decisions in Nicaragua," Economic Systems, Elsevier, vol. 43(1), pages 99-110.
    16. Pawera, Lukas & Manickam, Ravishankar & Wangungu, Carolyne & Bonnarith, Uon & Schreinemachers, Pepijn & Ramasamy, Srinivasan, 2024. "Guidance on farmer participation in the design, testing and scaling of agricultural innovations," Agricultural Systems, Elsevier, vol. 218(C).
    17. Tauer, Loren, 2019. "Farmer productivity by age in the United States," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 8(2), August.
    18. Sheng, Yu & Xu, Xinpeng, 2019. "The productivity impact of climate change: Evidence from Australia's Millennium drought," Economic Modelling, Elsevier, vol. 76(C), pages 182-191.
    19. Margarita Genius & Spiro Stefanou & Vangelis Tzouvelekas, 2009. "Productivity Growth and Efficiency under Leontief Technology: An Application to US Steam-Electric Power Generation Utilities," Working Papers 0913, University of Crete, Department of Economics.
    20. Kainth, Gursharan Singh & Bawa, Rajinder Singh, 2013. "Are Disparities in Indian Agriculture Growing? Status, Constraints and Determinants," Working Papers 253314, Guru Arjan Dev Institute of Development Studies (IDSAsr).

    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:gam:jsusta:v:15:y:2023:i:16:p:12169-:d:1213492. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.