Dynamics of productivity and technical efficiency in Russian agriculture

Abstract

This paper analyses regional productivity and technical efficiency development in Russian agriculture. We formulate a regional stochastic frontier model by assuming that producers maximise return to the outlay. We control for regional heterogeneity and endogeneity/simultaneity in input decisions, technical efficiency and technical change by employing a two-step estimation procedure. In the first step, we use the system Generalized Method of Moments approach (system GMM), which gives consistent estimates of the production technology parameters. In the second step, we apply the standard stochastic frontier approach to estimate technical efficiency and its determinants. © Oxford University Press and Foundation for the European Review of Agricultural Economics 2011; all rights reserved. For permissions, please email journals.permissionsoup.com2011 © © Oxford University Press and Foundation for the European Review of Agricultural Economics 2011; all rights reserved. For permissions, please email journals.permissionsoup.com.

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