A Panel Data Approach to the Measurement of Technical Efficiency and its Determinants: Some Evidence from the Tunisian Agro-Food Industry

This study investigates firm level technical efficiency of production and its determinants in the Tunisian agro-food industry. To this end, a stochastic production frontier model, in which technical efficiency effects are assumed to be a function of firm-specific variables and time, is estimated using panel data on 46 agro-food firms observed over a period of 14 years. Results indicate that technical efficiency in the sample of firms investigated ranges from a minimum of 45% to a maximum of 90% with an average technical efficiency estimate of 67%. Further, investigation of the sources of technical inefficiency in the sample reveals that the age of capital stock and firm size are negatively associated with efficiency, the share of skilled labour is positively associated with efficiency and, on average, technical efficiency tendes to decline during the period of investigation.