Measuring the Technical Efficiency of Thai Rubber Export Using the Spatial Stochastic Frontier Model Under the BCG Concept

Abstract

The Bio-Circular-Green economy (BCG) concept was originally started by the Thai government to promote national development and post-pandemic recovery in 2021. This study concentrates on the ways to increase the effectiveness of Thailand’s natural rubber exports. The primary goal is to evaluate Thailand’s natural rubber exports to ASEAN nations, in terms of their technical efficiency rankings. In order to achieve the main objectives based on the BCG concept (BCG policy measures in number 10: “investing in infrastructure”), the spatial dataset is applied with a stochastic frontier analysis model, which is called the panel spatial stochastic frontier analysis model estimation. The empirical results of this study to improve the technical efficiency of Thailand’s rubber export found that the infrastructure, especially the logistic system requirements of CLMV countries, needs to be addressed first. This is because the mixed spatial matrix (mixed-wij) represents significantly the level of logistics system development, which plays an important role in sustainably improving the technical efficiency. Therefore, the government and private sectors can use these empirical findings to promote policy recommendations in agricultural economics, especially the investment in logistic systems’ aspects of low carbon emissions and using renewable energy, which is the BCG concept.