A Frontier Function Approach to Decompose Agricultural Productivity Growth : The Case of Greece

The objective of this paper is to investigate the relative contribution of input use, technological change and technical efficiency to the production growth of the Greek agricultural sector, using a stochastic production frontier method (Battese and Coelli, 1999) to a panel of 608 farms over the 1992/97 period. A translog functional form is used to represent the production frontier and the maximum likelihood estimation technique is employed to estimate the empirical model. The empirical results show, first, that the average technical efficiency of Greek farms is between 55.2% and 59.7% and, second, that the contribution of technological change and technical efficiency on production growth is positive (0.224% and 0.899% respectively), whereas the contribution of input growth is negative (-3.064%). This study indicates that there is substantial scope for increasing production growth through the improvement of technological change and technical efficiency