AGRICULTURAL TOTAL FACTOR PRODUCTIVITY CHANGE AND ITS DETERMINANTS IN EUROPEAN UNION COUNTRIES

A. Nowak, K. Domanska, T. Kijek

Abstract: The present study concerns the measurement of changes in agricultural total factor productivity in 27 European Union (EU) countries. The analysis included the years 2007--2011. The study was conducted based on Malmquist productivity index completed with decomposition on technological changes and technical efficiency changes. In addition, the determinants of total productivity were identified in the study, and econometric modeling of their effect on total factor productivity (TFP) was conducted using Tobit model. The study demonstrated a small increase in agricultural TFP for the whole sample of 27 EU
countries over the examined period. The reason of this increase was mainly the changes in technical efficiency. An effect of technological changes was in turn relatively low and of negative character. The analysis of the factors determining TFP changes demonstrated that factors like: percentage of farm managers with complete agricultural education, average farm area and economy openness measured as a ratio of total export to total import are the stimulants. In turn, the variable like the share of farm managers aged above 55 years appeared to be dissimulated. It is worth to emphasize that soil quality, additional payment to investments and number of students’ in agricultural and related fields of study was insignificant from the total productivity changes point of view.

Keywords: agricultural productivity; European Union; technical progress; technicalefficiency; Total Factor Productivity (TFP)

Date published: 2017-10-12