Productivity and Efficiency in European Milk Production: Can We Observe the Effects of Abolishing Milk Quotas?

The study aims to explore the sources of competitiveness of dairy producers before and after the abolition of milk quotas in selected EU member states. The investigation is based on the stochastic frontier modelling of an input distance function in the specification of the four-error-component model. The model is estimated with a multistep procedure employing the generalized method of moments estimator, addressing the potential endogeneity of netputs, and panel data gained from the FADN database. The results revealed that total factor productivity experienced an increasing trend in the majority of the analysed countries. Since the main driver of productivity growth was found to be the scale effect, our findings support the hypothesis that abolishing milk quotas has a positive effect.

ICT and Economic Growth

Technological progress is a significant factor that drives economic growth. One of the most visible evidence of modern technological progress is Information and Communication Technology (ICT). In this paper we examine the importance of ICT in the context of economic growth. Based on the availability of data a group of 12 MENA economies (including GCC countries) are included in the study for the time period 1995-2007. A first look on the data clearly indicates huge increase in the use of internet, personal computers, land lines and cell phones for most of the countries in the sample. Using the error component model with Autoregressive disturbance of order 1 [AR(1)] results indicate significant evidence for 3 measures of ICT in enhancing economic growth. To avoid biased estimates in all results we always control for the other relevant variables that can potentially affect economic growth. Results are robust to inclusion of the other variables.