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Abstract
This paper analyzes efficiency and total factor productivity (TFP) change of large agricultural
enterprises during their transition to a market economy in Ukraine. In this case the efficiency
is calculated by data envelopment analysis and the productivity change is measured by the
Malmquist Productivity Change Index in the period between 1990 and 1999. On average, TFP
declined by 6% annually, dropping a total 42%. The main reason for the observed TFP decline
is a decrease in technical efficiency, which is found to be remarkably significant. At the same
time there is a high variation among individual enterprises: their distribution of efficiency
scores widens, which indicates that the farms diverge with respect to their economic performance.
The Tobit regression analysis is conducted where the efficiency scores are related to
factors such as farm type, farm size, initial conditions and legal form.