Stéphane Blancard

Short- and Long-Run Credit Constraints in French Agriculture: A Directional Distance Function Framework Using Expenditure-Constrained Profit Functions

This empirical application investigates the eventual presence of credit constraints using a panel of French farmers. The credit-constrained profit maximization model proposed by Fare, Grosskopf, and Lee is extended in three ways. First, we rephrase the model in terms of directional distance functions to allow duality with the profit function. Second, we model credit constraints in the short-run and investment constraints in the long-run using short- and long-run profit functions. Third, we lag the expenditure constraint one year to account for the separation between planning and production. We find empirical evidence of credit and investment constraints. Financially unconstrained farmers are larger, perform better, and seem to benefit from a virtuous circle where access to financial markets allows better productive choices.

Measuring potential gains from specialization under non-convex technologies

In this paper, the Free Coordination Hull (FCH) approach developed by Green and Cook (2004) is combined with the Free Disposal Hull (FDH) model to detect potential gains from specialization. As a non-convex approach that allows both directly observed and summed Decision Making Units to define the production technology, FCH is the relevant model for analysing optimal reallocation of activity among smaller and more specialized units. Indeed in more traditional Data Envelopment Analysis models the convexity assumption precludes the possibility of detecting potential gains from specialization and can only reveal economies of scope. Therefore non-convex technologies are required to model diseconomies of scope. On the basis of FDH and FCH technologies, an overall efficiency measure is decomposed into three components, namely: technical, size and specialization efficiencies. A 2003 database of French farms is used as an illustration. Results indicate that input inefficiency in the agricultural sector is mainly driven by a lack of specialization, which represents approximately 50% of the overall inefficiency.

Testing for nominal convergence in the Central American area: evidence from panel data unit-root tests

Inflation convergence between the Central American Area and the United States is investigated using both recent homogeneous and heterogeneous panel data unit-root methods. Strong rejections of unit-root hypothesis are found, and therefore evidence of Purchasing Power Parity, in the Central American countries for the 1981:1–2005:4 period. Then by considering the nominal convergence criterion, the dollarization system seems to be suited to this region.