Technical efficiency in the fresh fruit and vegetable sector: a comparison study of Italian and Spanish firms

Abstract

--Introduction. Agricultural cooperatives play an important socio-economic role in European (EU) countries, especially in the fresh fruit and vegetable sector. For this reason, in an economic perspective, the measurement of their efficiency has become an area of investigation which attracts great interest. Given that Spain and Italy are the biggest producers of fresh fruits and vegetables, the aim of this paper was to recognize the evolution of their technical efficiency. Materials and methods. Performance analysis in the economic field is rather controversial. Following Parkan (2002), it is possible to classify three main approaches to measure performance: index numbers; frontier methods and the non-parametric approaches. In this paper, efficiency was evaluated by applying the Data Envelopment Analysis (DEA) technique considering two separate frontiers. Through the AIDA database for Italian agricultural cooperatives and the SABI database for Spanish cooperatives, two different sets of 81 and 106 firms, respectively belonging to the fruit and vegetable sector, were selected over a five-year period (2001)(2002)(2003)(2004)(2005). Results. The analysis of the DEA results underlines the higher ability of Italian cooperatives to calibrate and optimize the inputs, and to maximize the results (technical efficiency), as well as the ability of Spanish cooperatives to exploit scale economies. Conclusions. Over the period taken into consideration, the average value of global technical efficiency decreased for Spanish as well as Italian cooperatives. In the case of Spanish cooperatives, this situation is due to the loss of ability to calibrate and optimize the inputs, even if the considered firms reveal ability to develop scale economies. In the case of Italian cooperatives, the results reveal the substantial firm technical efficiency, even if scale inefficiency undermines the global efficiency. Spain / Italy / fruits / vegetables / cooperatives / economic analysis / efficiencyEfficacité technique du secteur des fruits et légumes frais : une étude comparée des sociétés italiennes et espagnoles.Résumé --Introduction. Les coopératives agricoles jouent un rôle socio-économique important dans les pays européens (UE) et, en particulier, dans le secteur des fruits et légumes frais. Pour cette raison, d'un point de vue économique, la mesure de son efficacité est devenue un champ d'investigation qui suscite un grand intérêt. L'Espagne et l'Italie étant les plus grands producteurs de fruits et légumes frais de l'UE, mous avons cherché à étudier l'évolution de leur efficacité technique. Matériel et méthodes. L'évaluation des performances dans le domaine économique est plutôt controversée. Selon Parkan (2002), il est possible d'envisager trois approches principales pour mesurer ces performances : utilisation de nombres-indices ; méthodes des frontières, et méthodes non paramétriques. Dans cet article, l'efficacité du secteur a été évaluée à l'aide d'une analyse d'enveloppement des données (AED) en considérant deux frontières...

Harnessing a ‘Currency Matrix’ for Performance Measurement in Cooperatives: A Multi-Phased Study

“…BEA is centered on production function data that is utilized for efficiency assessment and comparisons [89]. The term "efficiency" is used to describe the level of performance that can be reached by an economic unit in accordance with its production possibilities [90,91]. Economic efficiency, in particular, refers to a firm's ability to convert inputs into outputs and respond optimally to economic signals (e.g., prices) [92].…”

“…Depending on the different functions used (e.g., profit, cost), different efficiency variants might be favored (e.g., X-efficiency, cost efficiency, total factor productivity) [97,98]. Not unexpectedly, efficiency appraisal is rather popular in empirical cooperative studies (e.g., [91,[94][95][96]99,100], while quite a few compare the efficiency of cooperatives with that of IOFs in the same sector (e.g., [101][102][103][104][105]). Except for the various efficiency alternatives, in this sub-category, we also included other efficiency-related metrics commonly used in production or agricultural economics, such as scale and scope elasticities [106] or the comparative cost index [100].…”

Essays on co-operatives’ idiosyncrasies : structure, performance, and membership

“…BEA is centered on production function data that is utilized for efficiency assessment and comparisons (Soboh et al, 2012). The term "efficiency" is used to describe the level of performance that can be reached by an economic unit in accordance with its production possibilities (Guzmán et al, 2009;Singh et al, 2001). Economic efficiency, in particular, refers to a firm's ability to convert inputs into outputs and respond optimally to economic signals (e.g., prices) (Hailu et al, 2005).…”

“…Depending on the different functions used (e.g., profit, cost), different efficiency variants might be favored (e.g., X-efficiency, cost efficiency, total factor productivity) (Doucouliagos and Hone, 2000;Hailu et al, 2007). Not unexpectedly, efficiency appraisal is rather popular in empirical co-op studies (e.g., Boyle, 2004;Caputo and Lynch, 1993;Guzmán et al, 2009;Huang et al, 2013;Sexton et al, 1989;Sueyoshi et al, 1998), while quite a few compare the efficiency of co-ops with that of IOFs in the same sector (e.g., Akridge and Hertel, 1992; Barros and Santos, 2007;Chapman and Christy, 1989;Dios-Palomares et al, 2013;Maietta and Sena, 2010;Singh et al, 2001). Except for the various efficiency alternatives, in this sub-category, we also included other efficiency-related metrics commonly used in production or agricultural economics, such as scale and scope elasticities (Schroeder, 1992) or the comparative cost index (Sueyoshi et al, 1998).…”

“…It is notable that the greater accuracy of efficiency measures makes them an appealing alternative to ratio analysis (Sexton and Iskow, 1993). Nonetheless, large data demands or confidential data (e.g., information on inputs and outputs) make these measures challenging to estimate (Bond, 2009;Guzmán et al, 2009).…”