Transient and persistent technical efficiency and its determinants: the case of crop farms in Austria

We analyse persistent and transient technical efficiency of crop farms in Austria from 2003 to 2017 by estimating the four-component stochastic frontier model using a multi-step procedure extend it account for heterogeneity bias introducing Mundlak adjustments. Moreover, we examine determinants both inefficiency. Results show that with favourable natural conditions, higher share family labour, lower owned land are more persistently efficient. Farm specialization, size, farmers’ age positively associated efficiency, while subsidies have adverse impacts. Significant technological progress coupled with, on average decreasing indicates diverging sector.