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Abstract
The objective of the paper is to assess the
effects of agglomeration on technical efficiency of
French pig farms. We use a two-stage method to
evaluate the effects of agglomeration on technical
efficiency. The first stage consists in calculating pig
activity’s efficiency scores with the non-parametric
method Data Envelopment Analysis (DEA). The second
stage is a truncated regression of these scores on
agglomeration variables. Data are for 899 French pig
producers in 2004. Results suggest that these farms were
as much affected by positive agglomeration externalities
(that are knowledge spillovers due to farms’ density, and
also arise from farms’ closeness to downstream market)
as any other businesses. There was however no evidence
of negative externalities in the form of constraints in
farmers’ land demand due to legal disposition relating to
manure spreading.