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Journal of Productivity Analysis

, Volume 50, Issue 1–2, pp 41–54 | Cite as

Dynamic stochastic analysis of the farm subsidy-efficiency link: evidence from France

  • Jean Joseph Minviel
  • Timo Sipiläinen
Article
  • 96 Downloads

Abstract

The existing literature on the subsidy-efficiency nexus is almost exclusively based on static modelling and thus ignores the inter-temporal nature of production decisions. The present paper contributes to this literature by developing a dynamic stochastic frontier model, which is then estimated using a sample of French farms over the period 1992–2011. For comparison purposes, the static counterpart of the dynamic model is also estimated. The results indicate that, in the dynamic case as well as in the static one, public subsidies are negatively associated with farm technical efficiency. Nevertheless, these linkages are found to be weak, and they are much weaker when dynamic aspects are taken into account.

Keywords

Dynamic efficiency Hyperbolic distance function Subsidies Farms 

JEL classification

D92 Q12 Q18 C54 D24 

Notes

Acknowledgements

The authors thank the editor and two anonymous referees for their helpful comments. The usual disclaimer applies.

Compliance with ethical standards

Conflict of interest

The authors declare that they have no conflict of interest.

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© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.SMART, INRARennesFrance
  2. 2.IHAP, Université de Toulouse, INRA, ENVTToulouseFrance
  3. 3.University of Helsinki, Department of Economics and ManagementHelsinkiFinland

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