IDEAS home Printed from https://ideas.repec.org/a/kap/jproda/v62y2024i2d10.1007_s11123-024-00728-0.html
   My bibliography  Save this article

The contribution of innovation to farm-level productivity

Author

Listed:
  • Iordanis Parikoglou

    (ETH)

  • Grigorios Emvalomatis

    (University of Crete)

  • Doris Läpple

    (Georg-August University of Goettingen)

  • Fiona Thorne

    (Ashtown)

  • Michael Wallace

    (University College Dublin)

Abstract

Innovation is a key driver of productivity growth. This paper proposes a novel methodology in order to explore the impact of farm-level innovations on farm productivity and its components (i.e. technology, efficiency and scale) using representative data from Irish dairy farms. We measure innovation by an index based on employed production practices, continuous innovation activity and knowledge weighted by expert opinions. The results suggest that more innovative Irish dairy farmers are more productive. Specifically, all farmers improve their production technology and efficiency through their use of innovations, but farmers at specific levels of innovativeness may experience a decrease in productivity due to the small scale at which they operate. This indicates that innovation has a non-linear effect on productivity. We discuss the policy implications for reducing the unequal gains of innovation across farmers.

Suggested Citation

  • Iordanis Parikoglou & Grigorios Emvalomatis & Doris Läpple & Fiona Thorne & Michael Wallace, 2024. "The contribution of innovation to farm-level productivity," Journal of Productivity Analysis, Springer, vol. 62(2), pages 239-255, October.
    • Handle: RePEc:kap:jproda:v:62:y:2024:i:2:d:10.1007_s11123-024-00728-0
    DOI: 10.1007/s11123-024-00728-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11123-024-00728-0
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11123-024-00728-0?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jean Joseph Minviel & Timo Sipiläinen, 2018. "Dynamic stochastic analysis of the farm subsidy-efficiency link: evidence from France," Journal of Productivity Analysis, Springer, vol. 50(1), pages 41-54, October.
    2. van den Broeck, Julien & Koop, Gary & Osiewalski, Jacek & Steel, Mark F. J., 1994. "Stochastic frontier models : A Bayesian perspective," Journal of Econometrics, Elsevier, vol. 61(2), pages 273-303, April.
    3. Skevas, Ioannis & Emvalomatis, Grigorios & Brümmer, Bernhard, 2018. "Productivity growth measurement and decomposition under a dynamic inefficiency specification: The case of German dairy farms," European Journal of Operational Research, Elsevier, vol. 271(1), pages 250-261.
    4. Bravo-Ureta, Boris E. & Evenson, Robert E., 1994. "Efficiency in agricultural production: The case of peasant farmers in eastern Paraguay," Agricultural Economics, Blackwell, vol. 10(1), pages 27-37, January.
    5. R. Karina Gallardo & Johannes Sauer, 2018. "Adoption of Labor-Saving Technologies in Agriculture," Annual Review of Resource Economics, Annual Reviews, vol. 10(1), pages 185-206, October.
    6. Stefanou, Spiro E. & Silva, Elvira, 2007. "AJAE Appendix: Dynamic Efficiency Measurement: Theory and Application," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 89(2), pages 1-19, May.
    7. Apurba Shee & Spiro E. Stefanou, 2016. "Bounded learning-by-doing and sources of firm level productivity growth in colombian food manufacturing industry," Journal of Productivity Analysis, Springer, vol. 46(2), pages 185-197, December.
    8. Balaine, Lorraine & Dillon, Emma J. & Läpple, Doris & Lynch, John, 2020. "Can technology help achieve sustainable intensification? Evidence from milk recording on Irish dairy farms," Land Use Policy, Elsevier, vol. 92(C).
    9. Boris E. Bravo‐Ureta & Robert E. Evenson, 1994. "Efficiency in agricultural production: the case of peasant farmers in eastern Paraguay," Agricultural Economics, International Association of Agricultural Economists, vol. 10(1), pages 27-37, January.
    10. Apurba Shee & Spiro E. Stefanou, 2015. "Endogeneity Corrected Stochastic Production Frontier and Technical Efficiency," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(3), pages 939-952.
    11. Boris Bravo-Ureta & William Greene & Daniel Solís, 2012. "Technical efficiency analysis correcting for biases from observed and unobserved variables: an application to a natural resource management project," Empirical Economics, Springer, vol. 43(1), pages 55-72, August.
    12. Griffiths, William E. & Hajargasht, Gholamreza, 2016. "Some models for stochastic frontiers with endogeneity," Journal of Econometrics, Elsevier, vol. 190(2), pages 341-348.
    13. Kumbhakar, Subal C. & Tsionas, Efthymios G., 2005. "Measuring technical and allocative inefficiency in the translog cost system: a Bayesian approach," Journal of Econometrics, Elsevier, vol. 126(2), pages 355-384, June.
    14. Giannis Karagiannis & Peter Midmore & Vangelis Tzouvelekas, 2004. "Parametric Decomposition of Output Growth Using A Stochastic Input Distance Function," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(4), pages 1044-1057.
    15. Robert G. Chambers & Teresa Serra, 2018. "The social dimension of firm performance: a data envelopment approach," Empirical Economics, Springer, vol. 54(1), pages 189-206, February.
    16. Fare, Rolf & Grosskopf, Shawna & Noh, Dong-Woon & Weber, William, 2005. "Characteristics of a polluting technology: theory and practice," Journal of Econometrics, Elsevier, vol. 126(2), pages 469-492, June.
    17. Jim Griffin & Mark Steel, 2007. "Bayesian stochastic frontier analysis using WinBUGS," Journal of Productivity Analysis, Springer, vol. 27(3), pages 163-176, June.
    18. Emir Malikov & Subal C. Kumbhakar & Efthymios G. Tsionas, 2015. "Bayesian Approach to Disentangling Technical and Environmental Productivity," Econometrics, MDPI, vol. 3(2), pages 1-23, June.
    19. Justin Yifu Lin, 1991. "Education and Innovation Adoption in Agriculture: Evidence from Hybrid Rice in China," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(3), pages 713-723.
    20. Joshua C. C. Chan & Justin L. Tobias, 2015. "Priors and Posterior Computation in Linear Endogenous Variable Models with Imperfect Instruments," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 30(4), pages 650-674, June.
    21. Stefanou, Spiro E., 2009. "A Dynamic Characterization of Efficiency," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 10(1), pages 1-16.
    22. Johannes Sauer & David Zilberman, 2012. "Sequential technology implementation, network externalities, and risk: the case of automatic milking systems," Agricultural Economics, International Association of Agricultural Economists, vol. 43(3), pages 233-252, May.
    23. Bernhard Brümmer & Thomas Glauben & Geert Thijssen, 2002. "Decomposition of Productivity Growth Using Distance Functions: The Case of Dairy Farms in Three European Countries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 628-644.
    24. Elvira Silva & Spiro E. Stefanou, 2007. "Dynamic Efficiency Measurement: Theory and Application," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(2), pages 398-419.
    25. Doris Läpple & Fiona Thorne, 2019. "The Role of Innovation in Farm Economic Sustainability: Generalised Propensity Score Evidence from Irish Dairy Farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 70(1), pages 178-197, February.
    26. Nathan D. DeLay & Nathanael M. Thompson & James R. Mintert, 2022. "Precision agriculture technology adoption and technical efficiency," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(1), pages 195-219, February.
    27. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    28. Heckman, James J, 1978. "Dummy Endogenous Variables in a Simultaneous Equation System," Econometrica, Econometric Society, vol. 46(4), pages 931-959, July.
    29. Viscarra Rossel, Raphael A. & Bouma, Johan, 2016. "Soil sensing: A new paradigm for agriculture," Agricultural Systems, Elsevier, vol. 148(C), pages 71-74.
    30. Bradfield, Tracy & Butler, Robert & Dillon, Emma J. & Hennessy, Thia, 2020. "The factors influencing the profitability of leased land on dairy farms in Ireland," Land Use Policy, Elsevier, vol. 95(C).
    31. Guan Zhengfei & Alfons Oude Lansink, 2006. "The Source of Productivity Growth in Dutch Agriculture: A Perspective from Finance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(3), pages 644-656.
    32. Kumbhakar, Subal C. & Tsionas, Efthymios G., 2016. "The good, the bad and the technology: Endogeneity in environmental production models," Journal of Econometrics, Elsevier, vol. 190(2), pages 315-327.
    33. Jonathan R. McFadden & Alicia Rosburg & Eric Njuki, 2022. "Information inputs and technical efficiency in midwest corn production: evidence from farmers' use of yield and soil maps," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(2), pages 589-612, March.
    34. Chrysovalantis Karafillis & Evaggelos Papanagiotou, 2011. "Innovation and total factor productivity in organic farming," Applied Economics, Taylor & Francis Journals, vol. 43(23), pages 3075-3087.
    35. Antonio Alvarez & Julio del Corral, 2010. "Identifying different technologies using a latent class model: extensive versus intensive dairy farms," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 37(2), pages 231-250, June.
    36. Jean-Paul Chavas, 2012. "On learning and the economics of firm efficiency: a state-contingent approach," Journal of Productivity Analysis, Springer, vol. 38(1), pages 53-62, August.
    37. Heckman, James J. & Robb, Richard Jr., 1985. "Alternative methods for evaluating the impact of interventions : An overview," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 239-267.
    38. Sugar, Catherine A. & James, Gareth M., 2003. "Finding the Number of Clusters in a Dataset: An Information-Theoretic Approach," Journal of the American Statistical Association, American Statistical Association, vol. 98, pages 750-763, January.
    39. William C. Horrace & Hyunseok Jung, 2018. "Stochastic frontier models with network selectivity," Journal of Productivity Analysis, Springer, vol. 50(3), pages 101-116, December.
    40. Johannes Sauer & Uwe Latacz-Lohmann, 2015. "Investment, technical change and efficiency: empirical evidence from German dairy production," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 42(1), pages 151-175.
    41. Elizaphan J. O. Rao & Bernhard Brümmer & Matin Qaim, 2012. "Farmer Participation in Supermarket Channels, Production Technology, and Efficiency: The Case of Vegetables in Kenya," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(4), pages 891-912.
    42. Läpple, Doris & Renwick, Alan & Thorne, Fiona, 2015. "Measuring and understanding the drivers of agricultural innovation: Evidence from Ireland," Food Policy, Elsevier, vol. 51(C), pages 1-8.
    43. Seth Wechsler & David Smith, 2018. "Has Resistance Taken Root in U.S. Corn Fields? Demand for Insect Control," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(4), pages 1136-1150.
    44. Luis Orea, 2002. "Parametric Decomposition of a Generalized Malmquist Productivity Index," Journal of Productivity Analysis, Springer, vol. 18(1), pages 5-22, July.
    45. Kelly, E & Shalloo, L & Geary, U & Kinsella, A. & Thorne, F & Wallace, M, 2013. "An analysis of the factors associated with technical and scale efficiency of Irish dairy farms," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 2(3), pages 1-11, April.
    46. Alfons Weersink & Evan Fraser & David Pannell & Emily Duncan & Sarah Rotz, 2018. "Opportunities and Challenges for Big Data in Agricultural and Environmental Analysis," Annual Review of Resource Economics, Annual Reviews, vol. 10(1), pages 19-37, October.
    47. repec:zwi:journl:v:43:y:2012:i:1:p:55-72 is not listed on IDEAS
    48. Travis A. Smith & Craig E. Landry, 2021. "Household Food Waste and Inefficiencies in Food Production," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(1), pages 4-21, January.
    49. Wooldridge, Jeffrey M., 2014. "Quasi-maximum likelihood estimation and testing for nonlinear models with endogenous explanatory variables," Journal of Econometrics, Elsevier, vol. 182(1), pages 226-234.
    50. Grigorios Emvalomatis, 2012. "Productivity Growth in German Dairy Farming using a Flexible Modelling Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 63(1), pages 83-101, February.
    51. David Hadley, 2006. "Patterns in Technical Efficiency and Technical Change at the Farm‐level in England and Wales, 1982–2002," Journal of Agricultural Economics, Wiley Blackwell, vol. 57(1), pages 81-100, March.
    52. Kutlu, Levent, 2010. "Battese-coelli estimator with endogenous regressors," Economics Letters, Elsevier, vol. 109(2), pages 79-81, November.
    53. Murty, Sushama & Robert Russell, R. & Levkoff, Steven B., 2012. "On modeling pollution-generating technologies," Journal of Environmental Economics and Management, Elsevier, vol. 64(1), pages 117-135.
    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. Iordanis Parikoglou & Grigorios Emvalomatis & Fiona Thorne, 2022. "Precision livestock agriculture and productive efficiency: The case of milk recording in Ireland," Agricultural Economics, International Association of Agricultural Economists, vol. 53(S1), pages 109-120, November.
    2. Skevas, Ioannis & Emvalomatis, Grigorios & Brümmer, Bernhard, 2018. "Productivity growth measurement and decomposition under a dynamic inefficiency specification: The case of German dairy farms," European Journal of Operational Research, Elsevier, vol. 271(1), pages 250-261.
    3. Skevas, Ioannis & Skevas, Theodoros, 2021. "A generalized true random-effects model with spatially autocorrelated persistent and transient inefficiency," European Journal of Operational Research, Elsevier, vol. 293(3), pages 1131-1142.
    4. Jean Joseph Minviel & Timo Sipiläinen, 2018. "Dynamic stochastic analysis of the farm subsidy-efficiency link: evidence from France," Journal of Productivity Analysis, Springer, vol. 50(1), pages 41-54, October.
    5. Dalheimer, Bernhard & Parikoglou, Iordanis & Brambach, Fabian & Yanita, Mirawati & Kreft, Holger & Brümmer, Bernhard, 2024. "On the palm oil-biodiversity trade-off: Environmental performance of smallholder producers," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    6. Ioannis Skevas & Grigorios Emvalomatis & Bernhard Brümmer, 2018. "The effect of farm characteristics on the persistence of technical inefficiency: a case study in German dairy farming," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 45(1), pages 3-25.
    7. Ioannis Skevas & Alfons Oude Lansink, 2020. "Dynamic Inefficiency and Spatial Spillovers in Dutch Dairy Farming," Journal of Agricultural Economics, Wiley Blackwell, vol. 71(3), pages 742-759, September.
    8. S. C. West & A. W. Mugera & R. S. Kingwell, 2022. "The choice of efficiency benchmarking metric in evaluating firm productivity and viability," Journal of Productivity Analysis, Springer, vol. 57(2), pages 193-211, April.
    9. Zhu, Liyun & Schneider, Kevin & Oude Lansink, Alfons, 2023. "Economic, environmental, and social inefficiency assessment of Dutch dairy farms based on the dynamic by-production model," European Journal of Operational Research, Elsevier, vol. 311(3), pages 1134-1145.
    10. Koiry, Subrata & Huang, Wei, 2023. "Do ecological protection approaches affect total factor productivity change of cropland production in Sweden?," Ecological Economics, Elsevier, vol. 209(C).
    11. Frederic Ang & Pieter Jan Kerstens, 2023. "Robust nonparametric analysis of dynamic profits, prices and productivity: An application to French meat-processing firms," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 50(2), pages 771-809.
    12. Ioannis Skevas, 2023. "A novel modeling framework for quantifying spatial spillovers on total factor productivity growth and its components," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(4), pages 1221-1247, August.
    13. Amer Ait Sidhoum & K Hervé Dakpo & Laure Latruffe, 2022. "Trade-offs between economic, environmental and social sustainability on farms using a latent class frontier efficiency model: Evidence for Spanish crop farms," PLOS ONE, Public Library of Science, vol. 17(1), pages 1-17, January.
    14. Magambo, Isaiah Hubert & Dikgang, Johane & Gelo, Dambala & Tregenna, Fiona, 2021. "Dynamic Technical and Environmental Efficiency Performance of Large Gold Mines in Developing Countries," EconStor Preprints 235859, ZBW - Leibniz Information Centre for Economics.
    15. Jean Joseph Minviel & Timo Sipiläinen, 2021. "A dynamic stochastic frontier approach with persistent and transient inefficiency and unobserved heterogeneity," Agricultural Economics, International Association of Agricultural Economists, vol. 52(4), pages 575-589, July.
    16. Areal, Francisco J. & Tiffin, Richard & Balcombe, Kelvin G., 2012. "Provision of environmental output within a multi-output distance function approach," Ecological Economics, Elsevier, vol. 78(C), pages 47-54.
    17. Fabian Frick & Johannes Sauer, 2021. "Technological Change in Dairy Farming with Increased Price Volatility," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(2), pages 564-588, June.
    18. Jonathan R. McFadden & Alicia Rosburg & Eric Njuki, 2022. "Information inputs and technical efficiency in midwest corn production: evidence from farmers' use of yield and soil maps," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(2), pages 589-612, March.
    19. Silva, Elvira & Magalhães, Manuela, 2023. "Environmental efficiency, irreversibility and the shadow price of emissions," European Journal of Operational Research, Elsevier, vol. 306(2), pages 955-967.
    20. Emir Malikov & Raushan Bokusheva & Subal C. Kumbhakar, 2018. "A hedonic-output-index-based approach to modeling polluting technologies," Empirical Economics, Springer, vol. 54(1), pages 287-308, February.

    More about this item

    Keywords

    Agricultural Innovation System (AIS); Total factor productivity; Efficiency; Agriculture; Dairy production; Stochastic frontier analysis;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    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:kap:jproda:v:62:y:2024:i:2:d:10.1007_s11123-024-00728-0. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.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.