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INDUSTRIAL AGGLOMERATION AND PRODUCTION COSTS IN NORWEGIAN SALMON AQUACULTURE
Get PDFDuring the last decade, empirical evidence of regional agglomeration economies has emerged for some industries. This paper argues that externalities from agglomeration are not only present in some manufacturing and service sectors, but can also occur in primary industries, such as aquaculture. Econometric analyses in this literature have primarily estimated rather restrictive production function specifications on aggregated industry data. Here, cost functions are estimated on firm-level observations of Norwegian salmon aquaculture farms. This approach provides us with measures of the cost savings due to agglomeration externalities. Furthermore, we avoid aggregation biases and can test a rich set of hypotheses on how these externalities affect the structure of costs at the firm level. According to the econometric estimates, there are significant cost savings associated with localization in regions with a large salmon aquaculture industry, suggesting the presence of positive agglomeration externalities. In fact, the results here suggest that for small firms localized in clusters, agglomeration externalities can compensate for internal economies of scale, making them competitive relative to larger firms localized outside clusters. The econometric results imply that there are significant welfare gains to be made from changes in the government regulation of the industry.Resource /Energy Economics and Policy,
LEARNING AND TECHNOLOGY SPILLOVER: PRODUCTIVITY CONVERGENCE IN NORWEGIAN SALMON AQUACULTURE
No full textAn econometric analysis of productivity convergence in Norwegian salmon aquaculture is undertaken. We also test for the effects of learning and external industry infrastructure capital. Empirical evidence for reduction in productivity differentials is found, but the estimated models also provide indications of more permanent differences in productivity and their underlying sources.production economics, Production Economics, Research Methods/ Statistical Methods,
LEARNING AND TECHNOLOGY SPILLOVER: PRODUCTIVITY CONVERGENCE IN NORWEGIAN SALMON AQUACULTURE
Get PDFAn econometric analysis of productivity convergence in Norwegian salmon aquaculture is undertaken. We also test for the effects of learning and external industry infrastructure capital. Empirical evidence for reduction in productivity differentials is found, but the estimated models also provide indications of more permanent differences in productivity and their underlying sources
STOCHASTIC PRODUCTION AND HETEROGENEOUS RISK PREFERENCES: COMMERCIAL FISHERS' GEAR CHOICE
Get PDFAs long as total effort cannot be completely controlled, a more thorough understanding of fishers' supply response decisions will be beneficial for fisheries managers. In this paper, we present a model of fishers' gear choice, which is empirically estimated on a panel of Swedish demersal trawlers. The approach allows for heterogeneity both in production technology and in risk preferences. Stochastic revenue functions with fixed effects are estimated and used to predict expected revenue and standard deviation for each trip. We employ a linear utility function in the mean-standard deviation framework and then analyze the gear choices, using the predicted values together with vessel capacity and lagged variables for the previous trip in a random parameters- logit model, which allow for heterogeneous preferences. The results indicate that fishers have a strong tendency to choose the same gear used on the previous trip, while in general they react to changes in economic and biological conditions by responding positively to increases in expected landing and negatively to increases in the variability of the expected landing values, indicating risk aversion
MODELING PRODUCTION RISK WITH A TWO-STEP PROCEDURE
Get PDFThis study deals with modeling of production risk by means of a two-step procedure. In contrast to earlier studies of production risk, we do not immediately adopt restrictive functional forms for the risky production technology. We first test for the presence of production risk. If production risk is found to be present, the mean and risk functions are estimated separately. This allows the use of more flexible functional forms for both the mean and the risk functions than commonly found in the literature. An empirical application to Norwegian salmon farming, where restrictive specifications of the technology are rejected, demonstrates the validity of our approach. Presence of production risk many primary production sectors implies that this approach should be considered in productivity studies
STOCHASTIC PRODUCTION AND HETEROGENEOUS RISK PREFERENCES: COMMERCIAL FISHERS' GEAR CHOICE
Get PDFAs long as total effort cannot be completely controlled, a more thorough understanding of fishers' supply response decisions will be beneficial for fisheries managers. In this paper, we present a model of fishers' gear choice, which is empirically estimated on a panel of Swedish demersal trawlers. The approach allows for heterogeneity both in production technology and in risk preferences. Stochastic revenue functions with fixed effects are estimated and used to predict expected revenue and standard deviation for each trip. We employ a linear utility function in the mean-standard deviation framework and then analyze the gear choices, using the predicted values together with vessel capacity and lagged variables for the previous trip in a random parameters- logit model, which allow for heterogeneous preferences. The results indicate that fishers have a strong tendency to choose the same gear used on the previous trip, while in general they react to changes in economic and biological conditions by responding positively to increases in expected landing and negatively to increases in the variability of the expected landing values, indicating risk aversion.Risk and Uncertainty,
MODELING PRODUCTION RISK WITH A TWO-STEP PROCEDURE
Get PDFThis study deals with modeling of production risk by means of a two-step procedure. In contrast to earlier studies of production risk, we do not immediately adopt restrictive functional forms for the risky production technology. We first test for the presence of production risk. If production risk is found to be present, the mean and risk functions are estimated separately. This allows the use of more flexible functional forms for both the mean and the risk functions than commonly found in the literature. An empirical application to Norwegian salmon farming, where restrictive specifications of the technology are rejected, demonstrates the validity of our approach. Presence of production risk many primary production sectors implies that this approach should be considered in productivity studies.Production Economics,
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The Regulatory Effect on Productivity Development: Comparison of Icelandic, Norwegian and Swedish Fisheries
Get PDFSeveral factors contribute to the productivity of nations' fisheries: (1) The biophysical conditions that determine the abundance of fish stocks, (2) government regulation of fisheries, and (3) innovation and adoption of (i.e. investments in) new fishing technologies. This paper analyzes the long-run productivity performance of three Nordic countries Iceland, Norway and Sweden. These countries offer a rich variety in fisheries management strategies. Iceland has a fully developed individual transferable catch quota (ITQ) system, Norway has since quite some time individual catch quotas (IQ) with limited transferability, while Sweden also uses TACs (Total Allowable Catch) but within a regulated open-access framework, i.e., individual fishers still race for the catch. Our paper analyzes the evolution of the industry's productive performance in light of industry structure and government policies towards the fisheries sector in these two countries. The analysis is supported by econometric productivity estimates of these countries performance using annual data from 1960 to 2003 for several competing production model specifications. Our econometric production models provide estimates of such measures as technical progress, labor productivity growth and total factor productivity growth. This analysis allows us to draw conclusions on the long-run evolution of economic performance without undue influence of shorter biological cycles in important fish stocks and other type of shocks. We find productivity gaps between the countries according to several productivity measures we employ, and discuss the evolution and sources of these differences
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