Technical and economic efficiency of Russian corporate farms: the case of the Moscow region

The research focus of the paper is to distinguish allocative and technical inefficiencies on Moscow region corporate farms. DEA specifications with both monetary and technical objective functions are applied. Reduced costs and sensitivity analyses are used to identify fixed inputs constraining either allocative or technical efficiency. To decrease heterogeneity and allow for the accessibility to different technologies of a given farm, the farms are grouped with respect to the set of outputs they produce. Thus, as a result of an unstable market environment, it is shown that allocative inefficiency causes 65-100 % (depending on the group) of total inefficiency in 2002 and 60-96 % in 1999. As for technical inefficiency, in 1999 its major source was the lack of liquidity (30-48 %) and other resources; in 2002 it was the lack of fodder (up to 37 %), liquidity (up to 31 %) and sown area (48 % in one of the groups). The role of insufficient management in regional farming inefficiency is evaluated as being much lower than many earlier studies suggest.