The milk sector has received much attention in Europe due to the abolishment of milk quotas in 2015 and its potential effect on the geographical distribution of milk production across countries. As a way of assessing the competitive advantage of Nordic EU countries, we investigated the productivity level and productivity growth of milk farms across eight countries of the Baltic Sea region from 1995 to 2010. We found considerable discrepancy in productivity performance across countries. TFP growth rates indicate that the competitive positions of the “old” EU members are stable, and that there is no catching up from the newer EU entrants. We offer explanations for this evolution based on the different patterns of structural change followed by the studied countries.


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