Agriculture’s Efficiency in the Context of Sustainable Agriculture—A Benchmarking Analysis of Financial Performance with Data Envelopment Analysis and Malmquist Index

Abstract

Climate change, increased government efforts towards sustainable economic growth, and all types of resource constraint have raised concern among academics and practitioners about the path to follow for keeping firms’ competitive advantage in such a dynamic environment. The purpose of the paper is to explore how firms operating in the agricultural sector have understood the need to identify and follow the best practitioners in the market, performing a benchmarking analysis aimed at providing insights on firms’ financial sustainability. As the literature has not sufficiently addressed the problem of firms’ financial sustainability operating in the Romanian Agriculture sector, we provide some empirical evidence related to the before and post-pandemic periods. The benchmarking analysis is developed using the Data Envelopment Analysis (DEA) method, which measures firms’ efficiency in terms of financial performance. Overall, the results suggest there is still much work to be done, and firms operating in the agricultural sector show high variation in terms of productivity from the perspective of financial indicators. The results are even more relevant in the context of the current COVID-19 pandemic, showing that only a part of the firms analyzed have developed their own dynamic capabilities that help them effectively find solutions to adjusting to the volatility of the market in a short timeframe.