Dynamic Productivity Growth in the Spanish Meat Industry

Transcription

1 Dynamc Poducvy Gowh n he Spansh Mea ndusy MAGDALENA KAPELKO a, ALFONS OUDE LANSNK b, SPRO STEFANOU c,b a Depamen of Busness Admnsaon, Unvesdad Calos de Madd, Span, e-mal: mkapelko@emp.uc3m.es b Busness Economcs Goup, Waennen Unvesy, Nehelands, e-mal: Alfons.OudeLansnk@wu.nl c Depamen of Aculual Economcs and Rual Socoloy, Penn Sae Unvesy, USA, e-mal: c@psu.edu Pape pepaed fo pesenaon a he 131 s EAAE Semna nnovaon fo Aculual Compeveness and Susanably of Rual Aeas, Paue, Czech Republc, Sepembe 18-19, 2012 Copyh 2012 by [Madalena Kapelko, Alfons Oude Lansnk and Spo Sefanou]. All hs eseved. Reades may make vebam copes of hs documen fo non-commecal puposes by any means, povded ha hs copyh noce appeas on all such copes.

2 Dynamc Poducvy Gowh n he Spansh Mea ndusy Madalena Kapelko, Alfons Oude Lansnk, Spo Sefanou Absac: Ths pape develops a dynamc Luenbee poducvy owh ndcao and decomposes o denfy he conbuons of echncal chane, echncal effcency chane and scale chane. The Luenbee poducvy owh ndcao s esmaed usn Daa Envelopmen Analyss. The empcal applcaon focuses on panel daa of Spansh mea pocessn fms ove he peod The dynamc Luenbee ndcao shows poducvy decease of on aveae n he peod unde nvesaon, wh echncal eess ben he man dve of chane, despe echncal and scale effcency owh. Key wods: deconal dsance funcon, dynamcs, Luenbee TFP, mea pocessn. 1 noducon The chaacezaon and measuemen of economc pefomance n boh heoy and pacce connues o clam consdeable aenon n he leaue. The majo aenon of hese economc pefomance measues connues o addess he measuemen of effcency and poducvy owh. The economcs leaue on effcency has poduced a wde ane of poducvy owh measues (see e.. Balk (2008) fo a compehensve eamen). The sen of he decson envonmen plays a cucal ole n he modeln famewok and he chaacezaon of esuls. The sac models of poducon ae based on he fm s ably o adjus nsananeously and noe he dynamc lnkaes of poducon decsons. The busness polcy elevance o dsnushn beween he conbuons of vaable and capal facos o neffcency o poducvy owh s clea. Fo eample, when vaable faco use s no meen s poenal, emedes can nclude bee monon of esouce use; when asse use s no meen poenal, emedes can nclude ann poams o enhance pefomance o even a evew of he oanzaon of asses n he poducon pocess o ake advanae of asse ulzaon. The weakness undelyn he sac heoy of poducon n eplann how some npus ae adually adjused has led o he developmen of he dynamc models of poducon whee cuen poducon decsons consan o enhance fuue poducon possbles. The chaacezaon of dynamc effcency can also buld on he adjusmen cos famewok ha mplcly measues neffcency as a empoal concep as accouns fo he slush adjusmen of some facos. n a nonpaamec sen, Slva and Sefanou (2007) develop a myad of effcency measues assocaed wh he dynamc enealzaon of he dual-based evealed pefeence appoach o poducon analyss found n Slva and Sefanou (2003). n a paamec sen, Runsuyawboon and Sefanou (2007) pesen and esmae he dynamc shadow pce appoach o dynamc cos mnmzaon. An nun pospec s o ncopoae he popees of he dynamc poducon echnoloy pesened n Slva and Sefanou (2003) no he deconal dsance funcon famewok, whch can eplo he Luenbee poducvy owh measuemen. The deconal dsance funcon offes he poweful advanae of focusn on chanes n npu and oupu bundles, neffcency and he echnoloy. Such a poducvy measue based on he deconal dsance funcon has s ons n Chambes, Chun and Fäe (1996) who defned a Luenbee ndcao of poducvy owh n he sac cone. A own

3 leaue employn hs appoach has emeed moe ecenly 1. Howeve, n he pesence of adjusmen coss n quas-fed facos of poducon, he sac measues do no coecly eflec poducvy owh. Recenly, Oude Lansnk, Sefanou and Sea (2012) poposed a dynamc Luenbee poducvy owh measue based on an economecally esmaed dynamc deconal dsance funcon and decomposed hs no he conbuon of echncal chane and echncal neffcency chane. Ths pape eends he dynamc Luenbee poducvy owh measue of Oude Lansnk, Sefanou and Sea (2012) o make a che decomposon no he conbuons of echncal effcency chane, scale effcency chane and echncal chane. The empcal applcaon uses a nonpaamec mehod (Daa Envelopmen Analyss) o esmae he dynamc deconal dsance funcon. The focus of he applcaon s on panel daa of Spansh mea pocessn fms ove he peod The mea pocessn ndusy s he mos mpoan food seco n Span, enean appomaely 20% of oal sales and employmen whn food ndusy and 2% of Spansh GDP n 2009 (Naonal Assocaon of Mea nduses of Span). s snfcance s emphaszed by he fac ha s one of he man epon secos of Span. The Spansh mea ndusy s chaacezed also by a low level of nnovaons and by he pedomnance of small and medum-szed enepses (Euopean Commsson, 2011). The peod analyzed concens he me of nceasn eulaon n he Euopean Unon (EU) wh ead o food safey, consume nfomaon, he mandaoy adopon of envonmenally-susanable pacces and he funconn of nenal make. n ode o cope wh he nceasn eulaon, Euopean fms had o undeake addonal nvesmens and deal wh moe admnsave budens (Euopean Commsson, 2004; Wjnands, Van de Meulen and Poppe, 2006). Anohe mpacn even s he ncease n poducon coss of mea poduces esuln fom he ncease n he coss of anmal feed n 2007 and Ths ncease n feed coss deceased he supply of slauhe cale whch seves as an npu fo he mea ndusy. Fnally, fom 2008 onwads he Spansh mea ndusy s ben affeced by he economc css as efleced by he decease n he demand fo mea. The ne secon develops he measues of dynamc poducvy owh and s decomposon. Ths s followed by he empcal applcaon o he panel of Spansh mea pocessn fms shown poducvy chane and s decomposon. The fnal secon offes concludn commens. 2 The Pmal Luenbee ndcao of Dynamc Poducvy Gowh The pmal Luenbee ndcao of dynamc poducvy owh s defned houh a dynamc deconal dsance funcon. Le R N denoe a veco of vaable npus, + veco of oss nvesmens, and L R C ++ M R R y epesen a veco of oupus a me, ++ F K he capal sock veco, ++ F R + he a veco of fed npus fo whch no nvesmens ae allowed. The poducon npu equemen se can be epesened V ( y : K ) = (, ) :(, ) can poduce y ven K. The npu equemen se s as { } defned by Slva and Oude Lansnk (2012) and assumed o have he follown popees: 1 See Chambes, Fäe and Gosskopf (1996), Boussema, e al. (2003), Fäe and Pmon (2003), Bec and Kesens (2004), Fäe and Gosskopf (2005), Balk (2008).

4 V ( y : K ) s a closed and nonempy se, has a lowe bound, s posve monoonc n, neave monoonc n, s a scly conve se, oupu levels ncease wh he sock of capal and quas-fed npus and ae feely dsposable. The npu-oened dynamc deconal dsance funcon D ( y,, ; ) s defned as follows: D (y,, ;, ) = ma R : -, + ( y : K ), { β ( β β ) V } R f ( β + β ) V ( : ) R ( ) ( ) N F N F ++ ++,,, 0, 0 -, y K fo some β, D (y,, ;, ) =, ohewse. The dsance funcon s a measue of he mamal anslaon of (, ) defned by he veco (, ) (1) n he decon, ha keeps he anslaed npu combnaon neo o he se β s subaced fom V ( y : K ). Snce and β s added o, he deconal dsance funcon s defned by smulaneously conacn vaable npus and epandn oss nvesmens. As shown by Slva and Oude Lansnk (2012), D (y,, ;, ) 0 fully chaacezes he npu equemen se V ( y : K ), ben hus an alenave pmal epesenaon of he adjusmen cos poducon echnoloy. Buldn on he Luenbee ndcao of poducvy owh defned by Chambes, Chun and Fäe (1996) o he dynamc sen by usn he dynamc deconal dsance funcon (assumn CRS) leads o: 1 [ D + 1( y,, ;, ) D 1( , )] + y + + +,+ + ; + L( ) = (2) 2 [ D ( y, ; ) D ( y + K + L ; )] Ths ndcao povdes he ahmec aveae of poducvy chane measued by he echnoloy a me +1 (.e., he fs wo ems n equaon 2) and he poducvy chane measued by he echnoloy a me (.e., he las wo ems n equaon 2).

5 V (K ) V +1 (K +1 ) ( +1, +1 ) (,,) D (K ) D (K,, ) D +1(K ) D +1(K,, ) 0 F.1. Luenbee ndcao of dynamc poducvy owh. The Luenbee ndcao of dynamc poducvy owh s llusaed aphcally n Fue 1. The quanes of npus and nvesmens a me and me +1 ae denoed as (, ) and ( + + 1), especvely. The dynamc deconal dsance funcon measues he dsance o he soquans a me and me + whch s denoed as D (,, ) + 1 y, ;. The Luenbee ndcao of dynamc poducvy owh can be decomposed no he conbuons of echncal neffcency chane ( TE) and echncal chane ( T): L( ) = T + TE (3) The decomposon of poducvy owh s obaned fom (2) by addn and subacn he em D + 1( , ) D (,, ) y, ; y, ;. Techncal chane s compued as he ahmec aveae of he dffeence beween he echnoloy (epesened by he fone) a me and me + evaluaed usn quanes a me (fs wo ems n (4)) and me +1 (las wo ems n (4)): 1 [ D + 1( y,, ;, ) D (,, )] y, ; T = 2 + [ D + 1( y + K + L ; ) D ( y + K + L ; )] Techncal chane can be seen n Fue 1 as he aveae dsance beween he wo soquans. Ths nvolves evaluan he soquans usn quanes a me, D ( y, K, L,, ;, ( y,, ;, ) and quanes a me ) D (4)

6 D + ( y + + +, +, + ;, ) (,, ). Dynamc echncal D y + K + L ; neffcency chane s he dffeence beween he value of he dynamc deconal dsance funcon a me and me +1: TE = D ( y,, ; ) D + 1( y + K + L ; ) (5) Techncal neffcency chane s easly seen fom Fue 1 as he dffeence beween he dsance funcons evaluaed usn quanes and echnoloes n peod and peod +1. We can decompose he Luenbee measue fuhe o allow fo scale effcency chane ( SE ). Wh he Luenbee measue hsocally ben developed n he cone of consan euns o scale, hs fuhe decomposon elaes he echnoloy assumpons of consan euns o scale o pem vaable euns o scale. Fom a pmal pespecve, he echncal neffcency chane componen n (5) can be decomposed as follows: PE = D (,, k y; VRS) D + 1( + + k + y+ 1; VRS) SE = D (,, k y; CRS) D (,, k y; VRS) D + 1( + + k + y+ 1; CRS) D + 1( + + k + y+ 1; VRS) [ ] Whee PE s echncal neffcency chane unde vaable euns o scale and SE s scale neffcency chane. (6) 3 Daa The daa used n hs sudy come fom he SAB daabase, manaed by Bueau van Djk, whch conans he fnancal accouns of Spansh companes. The sudy sample ncludes he fms belonn o he caeoy of fms n pocessn and pesevn of mea and poducon of mea poducs (NACE Rev. 2 code 101). Ths sudy focuses on fms of all sze caeoes: mco, small, medum-szed and lae. Afe flen ou companes wh mssn nfomaon and afe emovn he oules 2, he fnal daa se consss of beween 928 and 1527 fms ha opeaed n Span a leas wo consecuve yeas dun he peod fom 2000 o The daase s unbalanced and sums up o obsevaons (n oal obsevaons f we consde ha each obsevaon s epeaed wo mes n wo consecuve yeas). One oupu and hee npus (maeal coss, labou coss and fed asses) ae dsnushed. Oupu was defned as oal sales plus he chane n he value of he sock and was deflaed usn he ndusal pce nde fo oupu n mea pocessn ndusy. Maeal coss and labou coss wee decly aken fom he SAB daabase and wee deflaed usn he ndusal pce nde fo consume non-duables and labou cos nde n manufacun, especvely. Fed asses ae measued as he bennn value of fed asses fom he balance shee (.e. he end value of he pevous yea) and ae deflaed usn he ndusal pce nde fo capal oods. All pces used o deflae oupu and npus ae obaned fom he Spansh Sascal Offce (vaous yeas). Goss nvesmens n fed asses n yea ae compued as he bennn value of fed asses n yea +1 mnus he value of fed asses n yea plus he value of depecaon n yea. Table 1 povdes he descpve sascs of he daa used n hs sudy, fo he whole peod 2000/ / Oules wee deemned usn aos of oupu o npu. An obsevaon was defned as an oule f he ao of oupu ove any of he hee npus was ousde he neval of he medan plus and mnus wo sandad devaons.

7 Table 1. Descpve sascs of npu-oupu daa, 2000/ /2010. Vaable Mean Sd. dev. Mn Ma Fed asses Employee cos Maeal cos nvesmens Poducon Noe: he values of vaables ae pesened n housands of euos, consan pces fom The daa n Table 1 shows ha he aveae mea pocessn company n ou sample s elavely small n ems of he EU sze classfcaon, wh a mean unove of appomaely 6 mllon euos. On he ohe hand, he sandad devaons elave o he especve means ae elavely hh shown ha he fms n ou sample dffe consdeably n sze. 4 Resuls and Dscusson Table 2 summazes he ahmec means of dynamc Luenbee poducvy ndcao and s decomposon fo he pas of consecuve yeas. should be noed ha he med deconal dsance funcons used o compue dynamc Luenbee ndcao mh no have a bounded soluon. Leaue menons wo possble soluons o hs poblem n he cone of sac Luenbee, whch can be adaped o he dynamc cone: (1) o om he nfeasble obsevaons n he compuaon of aveaes o (2) o assn o he ndces he value equal o no chane n ndcao (n ou case he value equal o 0), whch s he saey we have followed. n eneal, Bec and Kesens (2009) ecommend epon he nfeasbles ha occued n he empcal applcaon as shown n Table 2. Ou of obsevaons, only 204 obsevaons ae found o be nfeasble (ha s 1.6% of he ene sample).

8 Peod Table 2. Evoluon of dynamc Luenbee poducvy chane. Numbe of fms Luenbee poducvy chane Techncal chane Techncal neffcency chane 2000/ Scale neffcency chane 2001/ / / / / / / / / Ahmec mean 2000/ / Noe: Ou of obsevaons, 204 (1.6%) wee found o be nfeasble. The esuls show conssenly a declne n dynamc poducvy n Spansh mea pocessn ndusy. Howeve, hee s a poducvy owh fom 2001 o 2002 and an upwad end of poducvy owh fom 2008 o Fom 2007 o 2008 he dynamc poducvy declne has a mean value of , fom 2008 o 2009 of only , bu fom 2009 o 2010 hee s a poducvy owh wh mean value of Fom he hee componens of dynamc Luenbee poducvy chane we can obseve ha he neave owh of poducvy s manly due o echnolocal eess obseved n mos yeas. Especally he peod fom 2005/2006 o 2009/2010 s chaacezed by a conssen echnolocal eess (wh an ecepon of 2008/2009 when echncal sanaon s obseved). Ths fndn mh be nepeed ha n hese peods he echnoloy elmnaes some poducve opons ha wee pevously avalable fo he fms n he Spansh mea pocessn ndusy. Unde he eulaoy envonmen of EU wh ead o food safey, he fms ae foced o adap o new sandads by undeakn addonal nvesmens and absobn addonal coss whou a poducve mpac. As a esul some poducon pacces could no be undeaken anymoe afe he new eulaon and consequenly he suaons of echncal eess ae poduced. n he peod fom 2006 o 2007 and fom 2007 o 2008, especally hh echncal eess s obseved. n hese yeas, he ncease n anmal feed coss occued and also he fnancal css added s neave effecs on he Spansh mea pocessn seco. These wo facos may also eplan he hhes declne occun fom 2007 o On he ohe hand, he peod unde nvesaon s chaacezed by neffcency declne, wh ecepon of 2000/ /2002 and 2003/2004. The decease n echncal neffcency mh eflec he eacon of he fms n he mea pocessn ndusy o he new eulaons. Theefoe, summazn, alhouh he bes pacce fone moved back, he fms n he sample moved owads he fone. Oveall, Table 2 ndcaes a declne n poducvy ove he me-peod (he Luenbee poducvy ndcao has a mean value of ), whch can be abued o

9 echnolocal eess (he echncal chane ndcao wh a mean value equal o ), no ben fully compensaed by a posve echncal neffcency chane (mean value of 0.022) and a posve scale neffcency chane (mean value equal o 0.005). Fue 2 shows he evoluon of dynamc Luenbee poducvy owh and s decomposon no echncal chane, echncal neffcency and scale neffcency chane. F. 2. Evoluon of Luenbee and decomposon. Fue ndcaes ha dynamc Luenbee poducvy ndcao vaes only slhly beween pas of yeas. The bes chanes ae assocaed wh echncal neffcency and echncal neffcency chane. Effcency owh clealy domnaes he analyzed peod wh he hhes ncease beween 2002 and On he ohe hand, he echncal eess s obseved n mos peods wh hhes declne n 2007/2008. Dynamc poducvy chane and s decomposon by fm sze s analyzed ne and epoed n Table 3. The compason s made acoss fou fms sze nevals: mco, small, medum-szed and lae. Follown EU defnon, he caeoy of mco/small/medum fms n made up of enepses whch employ less han 10/50/250 employees and whch have an annual unove no eceedn 2/10/50 mllon euos, especvely. The fms wh moe han 250 employees and an annual unove eceedn 50 mllon euos ae defned as lae. Dffeences n he componens of Luenbee poducvy owh beween hese oups ae assessed usn he es poposed by Sma and Zelenyuk (2006) 3. 3 Sma and Zelenyuk (2006) adap he nonpaamec es of he equaly of wo denses developed by L (1996). n pacula, hey popose wo alohms and amon hem hey found he Alohm 2 o be moe obus, hence we apply hee. n essence, he alohm s based on compuaon and boosappn he L sasc usn DEA esmaes, whee values equal o uny ae smoohed by addn a small nose. As poducvy chane and s decomposon ndces ae no uncaed, we om he sep of smoohn n he alohm. The mplemenaon of hs alohm s done n R usn 1000 boosap eplcaons.

10 Sze class Table 3. Dynamc Luenbee poducvy owh by fms szes (2000/ /2010). Numbe of fms Luenbee poducvy chane Techncal chane Techncal neffcency chane Scale neffcency chane Lae a a,b a a Medum b a b b Small b c,b c c Mco c c d d a,b,c,d ) dffeence beween a,b,c and d snfcan a 5% level. The esuls eveal ha dun 2000/ /2010 lae fms epeence poducvy owh, whle medum, small and mco fms epeenced a poducvy declne. Poducvy owh deceased moe fo mco ahe han fo small and medum-szed fms. Wh ead o echncal chane, alhouh all oups of fms epeence echncal eess, he dffeence beween sze classes s no always snfcan. Fnally, boh echncal neffcency chane and scale neffcency chane dffe snfcanly acoss sze oups. Techncal neffcency chane deceases wh sze: mco fms epeence he hhes conbuon of echncal neffcency chane, whle lae companes had a neave conbuon of echncal neffcency chane. The oppose paen s obseved wh espec o he chane n scale neffcency as mco fms undeo scale neffcency ncease and lae fms have he hhes scale neffcency declne. We also noe ha echncal eess obseved n he ene sample s dven manly by medum, small and mco fms, whle echncal effcency owh n he sample s due o mco and small fms. 5 Concluson Ths pape eends he dynamc Luenbee poducvy owh ndcao o decompose no he conbuons of echncal effcency chane, scale effcency chane and echncal chane. The empcal applcaon focuses on panel daa of Spansh mea pocessn fms ove he peod The esuls show ha dynamc Luebee poducvy owh was oveall small bu neave n he peod Techncal chane made a lae (on aveae 3%) neave conbuon o TFP owh, paculaly n he yeas afe he bennn of he fnancal css. Techncal neffcency educed on aveae n he peod unde nvesaon, o make 2% posve conbuon o TFP owh. The analyss of esuls fo fms n dffeen sze classes showed ha poducvy owh has been moe favoable on lae fms han small fms. Lae fms benefed fom a posve conbuon of scale neffcency chane yeldn an oveall poducvy mpovemen of 0.5% ove analyzed peod; medum, small and mco fms all had poducvy deceases ann fom -0.3% o - 0.4% on aveae ove analyzed peod. The esuls sues ha he noducon of hyene eulaons n he slauhe ndusy have caused a neave echncal chane n he peod unde nvesaon. Hence, polcy makes should be awae of he neave mpacs on compeveness of on-on eulaon. The esuls also sues ha he fnancal css had a lae neave mpac on he poducvy of he mea pocessn seco.

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