Epsilon Archive for Student Projects

Abstract

This paper estimates the total factor productivity change and examines how the ecological protection approaches affecting the total factor productivity change in the Swedish crop sector. In doing so, this paper used an unbalanced panel dataset for the period 2010 to 2016. Total factor productivity change and its sources were measured using the Malmquist total factor productivity index based on stochastic frontier analysis. And, the pooled ordinary least square regression model was used to detect how ecological protection approaches affect the change in total factor productivity. However, the mean technical efficiency of the Swedish crop sector was estimated to be 71%. The average total factor productivity change was estimated to be 1.6% from 2010 to 2016, but it was negative each year after 2012. Three components of total factor productivity change were estimated to be efficiency change, technical change, and scale change. Although the average scale change was positive, both the mean technical efficiency and mean technical change were negative. Also, ecological protection approaches such as the adoption of organic farming and mixed cropping or integrated farming negatively affected total factor productivity change. In conclusion, on average, 29% of the technical efficiency could be improved. The positive average change in total factor productivity indicated that total factor productivity could be improved more if the technical efficiency and technological progress increased. Policies are required in the form of compensation for or insurance against productivity loss to popularize the ecological protection approaches among farms.