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Measuring dynamic biased technical change in Lithuanian cereal farms
Author(s) -
Baležentis Tomas,
Oude Lansink Alfons
Publication year - 2019
Publication title -
agribusiness
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.57
H-Index - 43
eISSN - 1520-6297
pISSN - 0742-4477
DOI - 10.1002/agr.21623
Subject(s) - technical change , inefficiency , technological change , economics , investment (military) , lithuanian , econometrics , consumption (sociology) , dynamic efficiency , production (economics) , panel data , microeconomics , macroeconomics , productivity , social science , linguistics , philosophy , sociology , politics , political science , law
Changes in substitutability among inputs and outputs can help farms adapt to economic, technological, or societal changes. However, measurement of technical bias has only been carried out in a static framework, ignoring the confounding effects of technical bias due to adjustment costs. This paper integrates two streams of literature, that is one measuring dynamic inefficiency and the other measuring technical bias, thereby offering non‐parametric measures of technical bias for dynamic production technology. The dynamic framework explains the changes in the extent of output foregone to enable investments. The proposed framework is applied to a panel of data of Lithuanian cereal farms over the period 2004–2014. The results show technical change was, on average, more biased toward increasing output rather than investment. Technical change has been more focused on labor‐usage, relative to land and intermediate consumption in the same period.