A Meta-Analysis of Technical Efficiency in Farming: A Multi-Country Perspective

Abstract

The objective of this study is to undertake a meta-analysis seeking to explain the variation in average technical efficiency focusing on the agricultural sector. For this purpose, a meta-analysis of 126 technical efficiency studies on the agricultural sector of developing and developed countries was undertaken. In addition, the study contributes to cross-country productivity literature because the existing body of work in this area typically uses aggregate (i.e., national) level data to estimate total factor productivity and has ignored the technical efficiency component of productivity. The econometric results suggest that stochastic frontier models generate higher mean technical efficiency estimates than deterministic models, while parametric frontier models yield lower estimates than nonparametric. The difference between parametric and non-parametric frontiers is reduced when the translog specification is used. Also, frontier models using cross-sectional data produce lower estimates than those based on panel data. The econometric results also suggest that low-income countries (LICs) present a lower mean technical efficiency than high-income countries (HICs). A more detailed analysis reveals that Western European countries and Australia present, on average, the highest levels of mean technical efficiency among all regions after accounting for some methodological features of the studies. Eastern European countries exhibit the lowest estimate followed by Asian and African countries, while studies from Latin America and Caribbean countries, and from North American countries are in an intermediate position.