Evaluating the effect of subsidies for rural development on agri-food and forestry firms: Technical progress and efficiency

• José A. Pérez-Méndez ^[1] ; María Pérez-Urdiales ^[2] ; David Roibas ^[1]
  1. [1] Universidad de Oviedo

     Universidad de Oviedo

     Oviedo, España

     
  2. [2] University of California, Riverside

     University of California, Riverside

     Estados Unidos

     
• Localización: Applied economic analysis, ISSN 2632-7627, Vol. 27, Nº. 80, 2019, págs. 150-167
• Idioma: inglés
• Enlaces
  • Texto completo
• Resumen

  • Purpose – This paper aims to evaluate the impact of the subsidies established by Measure 123 of the Rural Development Policy on the productivity of a sample of agri-food and forestry companies in the region of Asturias over the period 2006-2009.

    Design/methodology/approach – The authors estimate a stochastic frontier function which allows subsidies to be considered as affecting both the level of technical efficiency and technical progress.

    Findings – The results show that while subsidies have a positive effect on the technical progress of companies in the agri-food industry, for the forestry industry, the effect materializes as an improvement in technical efficiency. Additionally, other factors affecting either, technical progress and technical efficiency were identified.

    Originality/value – This study adopts a model that allows the separate identification of the effect of subsidies on the level of efficiency, on the one hand, and on the technical progress, on the other.