Explaining Output Growth of Sheep Farms in Greece: A Parametric Primal Approach
This paper provides a parametric decomposition of output growth of sheep farms in Greece using an integrated primal approach, in which output growth is attributed to input growth (size effect), changes in technical efficiency, technical change, and the scale effect. The empirical results indicate that the scale effect, which has not been taken into account by previous studies, has a significant role in explaining output growth and TFP changes. It was found that during the period 1989-92 it caused a 0.61% output slowdown and it was the second main source of TFP changes after technical progress. Consequently, there would have been significant biases in TFP measurement by not accounting for the scale effect.
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