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Abstract
In this paper we analyse and compare various efficiency indicators for a number of European
Union (EU) countries: Belgium, Estonia, France, Germany, Hungary, Italy, The Netherlands
and Sweden. The availability of long period datasets between 1990 and 2006, allow us to
concentrate on the long time trends in technical efficiency especially in Old Member States.
This study is the first which may provide a comprehensive overview on the development in
farm level efficiency across eight European countries. Our main results are the following.
Generally, all countries have relatively high levels of mean technical efficiency ranging from
0.72 to 0.92 for both field crops and dairy farms. Interestingly the majority of countries have
better performance in dairy sectors in terms of higher levels of mean efficiency than in field
crop production. A slightly decreasing trend however may be observed for all countries.
Technical Efficiency estimates are largely in line with those obtained by previous studies.
Stability analysis revealed that in average 60% of farms maintain their efficiency ranking in
two consecutive years, whilst 20% improve and 20% worsen their positions for all countries.
However, these ratios slightly fluctuate around these values for one year to next year.
Mobility analysis ranks countries according to the mobility of SFA scores within the
distribution. Farms in New Member States are more mobile than those in EU15. Total
productivity changes are analysed in two steps. First, we do not find a definite trend in total
factor productivity changes. Second, we address the question whether total factor productivity
changes converge or diverge over time. Using panel unit root tests our estimations reveal a
convergence of productivity across old EU member countries during analysed period. Finally,
we decompose the total factor productivity changes into its main elements. Field crop farm
indicators generally present significantly higher volatility than dairy farms. Random effect
panel regression of Total Factor Productivity Change on its components shows Technological
Change as being the significant positive driver for crop farms, whilst Technical Efficiency
Change followed by Technological Change are the most important for dairy farms. In addition
we do not find significant impacts of CAP reforms in 1992 and 2000 on total productivity changes.