Technical Progress and Regress in Norwegian Salmon Farming: A Malmquist Index Approach

In this study we measure change in total factor productivity for production of Atlantic salmon in Norway from 2001 to 2008. The Malmquist Productivity Index (MPI) is used. Our results demonstrate that total factor productivity change measured by MPI increased from 2001 to 2005, but thereafter regressed. This is due to a regress in the technical change component of the MPI. The efficiency change component is as strong as before. We interpret this result as an indication that the industry has reached a level of technological sophistication from where it is difficult to make substantial progress. For an individual producer it may still be possible to improve efficiency by catching up relative to the best practice frontier When this possibility is exhausted, the total factor productivity change for the industry may come to a halt.