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Abstract
The horticulture sector plays a relevant role in Spanish agriculture and economy.
Their participation in the final agricultural production reached 37% and it represents an
important source of employment generating the half of the job in the entire Spanish
agricultural sector (MARM, 2010). The purpose of this paper is the evaluation of
dynamic technical efficiency for both outdoor and greenhouse Spanish farms specialized
in horticulture production. A dynamic stochastic frontier model is developed to estimate
the long run technical efficiency and it persistence for both samples. This analysis has
been applied to 126 and 90 Spanish greenhouses and outdoor horticulture farms
respectively using Farm Accounting Data Network. Those farms were observed during 6
years from 1999 to 2004.
The static efficiency level of greenhouse farms is higher than outdoor farms by
approximately 12%. The evolution of the static efficiency level during the studied period
shows an increase by 15% in the greenhouse farms comparing to a decrease by 11% for
outdoor horticulture farms. This difference can be explained by a best control of the use
of different inputs in the case of greenhouse horticulture as well as the implantation of
high technology that improves efficiency level over years. The empirical results also
show a big difference of level between static and dynamic technical efficiency for both
samples. These results are consistent with the high value of the technical inefficiency
persistence parameter for both cases which suggests that the technical inefficiency is
highly persistent and shows a strong competition in this sector.