We investigate productivity development and its relation to resource reallocation effects in the dairy sector in southeast Germany during the phasing-out of the European Union milk quota. We use a farm level dataset containing financial accounting data for a period of 15 years. Farm-level productivity is estimated by applying a proxy approach recently introduced in the literature. We compare this approach to other estimation approaches as well as an index based analysis. After aggregation we decompose sector productivity into unweighted mean productivity and a covariance term measuring the allocation of resources toward more productive farms. We observe an increase in the covariance term coinciding with a period of rather volatile milk prices. Therefore, we hypothesize that reallocation of production resources due to market deregulation is triggered or even enforced by extreme price levels. We seek to find support for this hypothesis by a regression analysis linking the measure for the potential covariance between resource reallocation and productivity on the one hand and price variability on the other. In this analysis we find some empirical evidence for this hypothesis.

The food sector is considered a mature and a research and development (R&D) extensive industry. Nevertheless, also food companies face numerous challenges and cannot abstain from innovation activity if they want to keep their competitive stance. We examine the impact of innovation on labor productivity in European food companies in comparison to results for firms operating in high-tech sectors. The central motivation of our study is that the observed low R&D intensity in the food sector should be mirrored in different productivity effects of innovation when compared to the high-tech sector. We use microdata from the European Union's "Community Innovation Survey" (CIS) and apply an endogeneity-robust multi-stage model that has been applied by various recent studies. Our results point out major differences between the examined subsectors. While we find strong positive effects of innovation on labor productivity for food firms, we find insignificant effects in the high-tech sector. This suggests that the returns to innovation might be best evaluated separately by sector rather than for the manufacturing sector as a whole.

Accompanied by steps towards market liberalisation, dairy farmers in the European Union have been confronted with increased price risk in recent years, which might affect their innovation behaviour. We examine technological change and technical efficiency of specialised dairy farms in West Germany before and during a phase of volatile milk prices. Additionally, we compare the results with mixed dairy farms, which might have an advantage by diffusing price risk through diversification. Our results indicate a slowdown in technological change in specialised as well as in mixed dairy farming coinciding with the start of a volatile market phase.

Farmers have started to adopt Information and Communication Technology (ICT), which has considerable potential to impact farm performance. This study uses data from a 2018 survey of 763 vegetable smallholder farms in China to estimate the impact of ICT on technical efficiency (TE). We adopt propensity score matching to create a balanced sample of ICT users and non-users, and a stochastic frontier model with sample selection correction to compare the two groups’ TE. After accounting for self-selection bias from both observables and unobservables, the study finds a positive effect of ICT use on TE. On average, the TE score of ICT users is 0.64, whereas ICT non-users have a lower score of 0.57. A quantile regression analysis further reveals a heterogeneous impact of ICT on TE, with the largest effects among less efficient farms. These results suggest that vegetable farmers’ performance could be fostered by the widespread use of ICT. JEL codes: D24, Q12, Q16