Dynamics of productivity and technical efficiency in Russian agriculture

Abstract

This paper analyses regional productivity and technical efficiency development in Russian agriculture. We formulate a regional stochastic frontier model by assuming that producers maximise return to the outlay. We control for regional heterogeneity and endogeneity/simultaneity in input decisions, technical efficiency and technical change by employing a two-step estimation procedure. In the first step, we use the system Generalized Method of Moments approach (system GMM), which gives consistent estimates of the production technology parameters. In the second step, we apply the standard stochastic frontier approach to estimate technical efficiency and its determinants.

Assessing the Impacts of Pillar 1 and 2 Subsidies on TFP in French Crop Farms

“…weather conditions affecting yields). Moreover, the system GMM has the advantage over the Stochastic Frontier Analysis (SFA) approach of taking into account the problems induced by the simultaneity/endogeneity of independent variables (Bokusheva et al. , 2012), that is, the fact that inputs are likely to be correlated with productivity shocks.…”

“…weather conditions affecting yields). Moreover, the system GMM has the advantage over the Stochastic Frontier Analysis (SFA) approach of taking into account the problems induced by the simultaneity ⁄ endogeneity of independent variables (Bokusheva et al, 2012), that is, the fact that inputs are likely to be correlated with productivity shocks. As has been acknowledged in a seminal article by Marshak and Andrews (1944), this will result in biased estimates of the production function, and consequently a spurious measure of productivity.…”

Impact of regional diversity on production potential: an example of Russia

“…In addition, the authors found evidence of different technologies of production across regions due to diversity of regional development. Bokusheva et al (2011) found a decreasing trend in regional effi ciency until 2000, followed by steady improvement afterwards. Based on calculations of total factor productivity, the authors found heterogeneity of the economic and institutional environment across the country.…”

Increasing crop production in Russia and Ukraine—regional and global impacts from intensification and recultivation

“…After the collapse of the Soviet Union, during the 1990s, the agricultural sectors of former Soviet countries were suddenly faced with increasing international competition, while at the same time input-and output-subsides were drastically reduced (Nefedova 2011, Lerman et al 2004. The rural population increasingly left the countryside (Ioffe et al 2004, fertilizer consumption dropped significantly (Schaffartzik et al 2014, Swinnen et al 2017 and agricultural productivity and output declined (Bokusheva et al 2012). The livestock sector was particularly affected and an enormous decline in livestock production resulted in diminishing demand for animal feed (Liefert et al 2013).…”