Analysing determinate components of an approximated Luenberger–Hicks–Moorsteen productivity indicator: An application to German dairy‐processing firms
Frederic Ang,
Stephen J. Ramsden
Abstract:The Luenberger–Hicks–Moorsteen (LHM) total factor productivity (TFP) indicator has sound theoretical properties, but its decomposition yields indeterminate components of technical change and scale efficiency change that can become infeasible. The current paper decomposes the approximating Bennet indicator, which results in determinate components of technical change, technical efficiency change, scale efficiency change and mix efficiency change that are always feasible. The application focuses on the German dai… Show more
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