Robust nonparametric analysis of dynamic profits, prices and productivity: An application to French meat-processing firms. (28th December 2022)

• Record Type: Journal Article
• Authors: Ang, Frederic; Kerstens, Pieter Jan
• Is Part Of: European review of agricultural economics. Volume 50:Number 2(2023)
• Page Start: 771
• Page End: 809
• Publication Date: 2022-12-28
• Subjects: profit -- productivity -- adjustment cost -- data envelopment analysis -- m-out-of-n bootstrap; Agriculture -- Economic aspects -- Periodicals; Agriculture -- Economic aspects -- Europe -- Periodicals; 338.109405
• DOI: 10.1093/erae/jbac029
• Languages: English
• ISSNs: 0165-1587

Abstract

Abstract: Appropriately considering adjustment costs, this paper develops a robust nonparametric framework to analyse profits, prices and productivity in a dynamic context. Dynamic profit change is decomposed into a dynamic Bennet price indicator and a dynamic Bennet quantity indicator. The latter is decomposed into explanatory factors. It is shown to be a superlative indicator for the dynamic Luenberger indicator. The application focuses on 1, 638 observations of French meat-processing firms for the years 2012–2019. Using m -out-of- n bootstrapped data envelopment analysis, we obtain robust estimates and confidence intervals. The components of dynamic productivity growth fluctuate substantially. However, these fluctuations are often statistically insignificant.