'Distorted gravity: The intensive and extensive margins of international trade' revisited ; an application to an intermediate Melitz model

With the extension of the standard Melitz Model from Ahn et al. [2011], the important role of intermediaries in facilitating trade is now recognized. In this paper, we are going to expand Chaney's [2008] approach to an Intermediate Melitz Model. By researching if Chaney's results still apply for an Intermediate Melitz Model, main results of Chaney are confirmed for the direct export model, but this is not so for the indirect export mode. Here, the elasticity of substitution still dampens the extensive margins; however, whether the dampening effect on the extensive margin still dominates the magnifying effect on the intensive margin is ambiguous. Also, the elasticities of trade ows are no longer larger, but rather smaller than in the Krugman Model. All results are economically meaningful. --international trade,Intermediate Melitz Model,firm heterogeneity,elasticities of trade flows,extensive and intensive margins

The impact of policy reform on productivity and efficiency in Chinese agriculture: A distance function approach

The study is devoted to the measurement of productivity and efficiency change in Chinese farming sector over the reform process in the 1980s and 1990s. Within an output distance function framework, an index of total factor productivity is decomposed into technical and allocative efficiency, technical change, and scale effects. We estimate a parametric output distance function using individual farm household data from the province Zhejiang over the period 1986-2000. Results indicate that during the more market-oriented reform period in the mid 1980s productivity and technical efficiency increased while allocative efficiency remain constant. However, productivity growth and technical efficiency slow in the mid 1990s when market orientation of the reforms was reduced and self-sufficiency as a major goal reappeared on the political agenda. --productivity growth,efficiency change,China,stochastic distance frontier

Analysis of productivity growth within a distance function approach: An application to European dairy farms

A detailed decomposition of the sources of the Total Factor Productivity (TFP) growth index within an output distance function framework was carried out, looking at the following components: technical change, change in technical efficiency, scale component, and violations of the profit maximizing assumption for inputs and outputs. Stochastic translog output distance functions were estimated by using panel data from dairy farms over the period 1991- 1994 for three European regions (northern Germany, the Netherlands, Poland) separately and for all regions together. The decomposition results were then examined , and a detailed comparison of the separate and the common model was made. --

Technical efficiency in the Chilean agribusiness sector

The reform-process towards a higher world-market orientation has a long tradition in Chile, with all its strengths and weaknesses. The food processing industry is highly competitive on the worldmarket. The following paper investigates the technical efficiency of the Chilean food processing industry between 2001 and 2007. We used a data-set from the 5,941 of firms in food processing industry. The observations are taken of the 'Annual National Industrial Survey'. The method of stochastic frontier analysis is applied; the heteroscedasticity-model is used in order to analyze the determinants of technical efficiency. We included variables capturing different effects before and after the introduction of a liberalization policy in 2004. Raw materials and labor have to largest impact on the output. We could show that technical efficiency is different in the periods before and after 2004. The region with the highest level of efficiency is the metropolitan region around Santiago de Chile. --Technical Efficiency,Food Processing Industry,Chile

Technical efficiency and farmland expansion: Evidence from oil palm smallholders in Indonesia

This study asks whether innovation in smallholder production reduces or accelerates land expansion. Even though innovation in agriculture has reduced land expansion globally, rebound effects can occur locally and often at the expense of vital ecosystem functions. In contrast to other studies that investigate rebound effects in response to technological innovation, our study focuses on technical efficiency, the remaining component of total factor productivity. We use a short panel dataset from smallholder oil palm farmers in Sumatra, Indonesia, and develop a two-stage approach in which we estimate technical efficiency and determine its land expansion effect. Our findings suggest that technical efficiency and in particular land efficiency are low, indicating that 50% of the currently cultivated land could be spared. However, the land-sparing effect of increasing technical efficiency is at risk of being offset by about half due to a rebound effect. To maximize the conservation potential from increasing smallholder efficiency, policies need to simultaneously incentivize well-functioning land markets and stricter protection measures for land with high ecological value to mitigate local rebound effects

Spatial market integration in the EU beef and veal sector: policy decoupling and export bans

The 2003 reforms of the Common Agricultural Policy of the Euro-pean Union allowed for discretionary implementation among member states. Discretion was allowed with respect to the timing and the degree of decoupling of policy support. Differences among member states were particularly apparent in the European beef and veal sector. Using weekly data from 2003 to 2009, we assess the consequences of different national implementation strategies of the reforms on market integration for young calves, which are intensively traded in the European Union. Time series properties are analyzed with a range unit-root test after which a multivariate cointegration model is estimated. We find that the calf markets in Germany, France, the Netherlands and Spain are integrated and tightly interrelated as evidenced by both short and long-run price transmis-sion. We also find strong statistical support for the hypothesis that decoupling reduced calf price levels. Additionally, we ascertain that the outbreak of the Blue Tongue disease induced a structural change in parts of the EU calf market. Using counterfactual scenarios, we provide an indication of the cost involved with granting member states such a high degree of discretion in implementation. We conclude that the national markets studied here belong to a common market. --2003 CAP reform,calf market,decoupling,EU,market integration,price transmission

Productivity of hired and family labour and determinants of technical inefficiency in Ghana's fish farms

This paper examines the productivity of hired and family labour and determinants of technical inefficiency of fish farms in Ghana. A modified Cobb-Douglas stochastic frontier production function which accounts for zero usage of family and hired labour is employed on cross-sectional data of 150 farmers collected in 2007. The results reveal that family labour, hired labour, feed, seed, land, other cost and extension visit have reasserting influence on fish farm production. Findings also show that family and hired labour used for fish farming production in Ghana may be equally productive. The combined effects of operational and farm specific factors (age, experience, land, gender, pond type and education) influence technical inefficiency although individual effects of some variables may not be significant. Mean technical efficiency is estimated to be 79 percent. Given the present state of technology and input level, the possibility of enhancing production can be achieved by reducing technical inefficiency by 21 percent through adoption of practices of the best fish farm. --Ghana,fish farms,technical inefficiency,hired and family labour,stochastic frontier.

The role of crop protection products of multinational brands for agricultural sustainability in the cotton-growing zone in Pakistan

Despite the use of Bt (Bacillus thuringiensis) cotton in Pakistan, the country is still far behind in farm harvest per unit compared to other cotton-producing countries such as China and Turkey. Cotton is a pest-sensitive crop, and inappropriate crop protection products contribute to lower agricultural sustainability. This issue attracts additional attention in developing countries such as Pakistan, where generic formulation/sub-standard crop protection products are easily and abundantly available. However, the impact of the application of crop protection products of multinational brands in contrast to generic formulation/sub-standard crop protection products on total farm revenue is explicitly not documented. We employ a stochastic frontier production framework using a survey of smallholder farming households in the cotton-growing zone in Pakistan (N=266). The estimates of stochastic frontier production models show a positive relationship between the use of crop protection products of multinational brands and total farm revenue. The estimates of technical inefficiency models show that specialisation and regional dummy, among others, emerge as the key to determining the smallholders’ technical inefficiency. To get higher farm revenue and technical efficiency, we propose the agricultural policy makers of Pakistan to explicitly focus on the quality of crop protection products. Moreover, agricultural policy makers are advised to revisit the cropping system in the study area. This revisit may positively contribute to agricultural sustainability