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Is the Collapse of Agricultural Output in the CEECs a Good Indicator of Economic Performance? A Total Factor Productivity Analysis

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  • Axel Tonini
  • Roel Jongeneel

Abstract

This paper analyzes total factor productivity (TFP) growth in agriculture for the ten Central and East European countries (CEECs) that began formal negotiations for EU accession in September 1998. A panel data set is constructed consisting of pooled time series data for the ten CEECs from 1993 to 2002, and it is used to estimate a time-varying stochastic production frontier. A Malmquist index of TFP growth is estimated and decomposed into efficiency change and technical change. The results show that despite the fall in output, TFP growth rates were positive for all ten CEECs. This suggests that the collapse of agricultural output in the CEECs is not necessarily a good indicator of agricultural performance. An analysis that only focuses on output decline provides a partial and misleading interpretation of the success of agricultural reforms. Also, estimates of technical efficiency confirm the hypothesis that large-scale farming performs better than small-scale farming when markets are missing and economic conditions are uncertain.

Suggested Citation

  • Axel Tonini & Roel Jongeneel, 2006. "Is the Collapse of Agricultural Output in the CEECs a Good Indicator of Economic Performance? A Total Factor Productivity Analysis," Eastern European Economics, Taylor & Francis Journals, vol. 44(4), pages 32-59, August.
    • Handle: RePEc:mes:eaeuec:v:44:y:2006:i:4:p:32-59
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    Citations

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    Cited by:

    1. Fertö, Imre, 2014. "The Structural Transformation in Central and Eastern European Agriculture," CEI Working Paper Series 2014-9, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    2. Alessandro Magrini, 2021. "A Stochastic Frontier Model to Assess Agricultural Eco-efficiency of European Countries in 1990–2019," International Journal of Statistics and Probability, Canadian Center of Science and Education, vol. 10(4), pages 138-138, July.
    3. Tomislav Herceg & Iva Vuksanovic, 2017. "Technological progress in Croatian perennial agriculture," International Journal of Economic Sciences, International Institute of Social and Economic Sciences, vol. 6(1), pages 18-32, May.
    4. Supawat Rungsuriyawiboon & Xiaobing Wang, 2009. "Agricultural productivity growth in traditional and transitional economies in Asia," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 23(2), pages 52-72, November.
    5. A. Tonini, 2012. "A Bayesian stochastic frontier: an application to agricultural productivity growth in European countries," Economic Change and Restructuring, Springer, vol. 45(4), pages 247-269, November.
    6. Cecilia ALEXANDRI & Corina SAMAN & Bianca PAUNA, 2021. "Exploring the Relationship Between Farm Productivity and CAP Subsidies for the NMS," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 124-140, December.
    7. Malgorzata Sulimierska, 2014. "Total factor productivity estimation for Polish manufacturing industry: A comparison of alternative methods," Working Paper Series 6714, Department of Economics, University of Sussex Business School.
    8. Marzec, Jerzy & Pisulewski, Andrzej, 2019. "The Measurement of Time Varying Technical Efficiency and Productivity Change in Polish Crop Farms," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 68(1), March.

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