Productivity in agribusiness firms and its determinants in Abia State, Nigeria

Abstract

The study examined total factor productivity in agribusiness firms and its determinants in Abia state, Nigeria. The specific objectives includes, (1) to classify and examine firm specific characteristics that enhance productivity in agribusiness and (2) to identify factors that influence total factor productivity in agribusiness firms in Abia State. The first objective was realised with descriptive statistics while the second was determined with stochastic frontier production function. Data for the study was collected from 40 agribusiness firms. Analysis of the study was done using descriptive statistics and stochastic frontier production models. The result of the maximum likelihood estimates of the stochastic frontier production function indicates that the determinants of total-factor productivity (TFP) are skill labour, raw material, years of operation, scale of operation, access to credit and distance to nearby market. While the findings of the study reveals that skilled labour with coefficient of 0.823, years of operation, and access to credit exerted positive influence, variables like cost of raw material with coefficient of 0.097, distance to nearby market and scale of operation had negative influence on total factor productivity of agribusiness firm in the area. Based on this, it was recommended that agribusiness firms should build capacity of their workers through regular mounting of training programs and adopt strategies that would reduce cost of raw materials by purchasing in bulk among other things. Key word: Total, productivity, firms, Abia, State.