Parametric decomposition of the input-oriented Malmquist productivity index: with an application to Greek aquaculture

Using a stochastic frontier approach and a translog input distance function, this paper implements the input-oriented Malmquist productivity index to a sample of Greek aquaculture farms. It is decomposed into the effects of technical efficiency change, scale efficiency change, input-mix and, technical change, which is further attributed to neutral, output- and input-induced shifts of the frontier. Implementable expressions for the aforementioned components are obtained using a discrete changes-approach that is consistent with the usual discrete-form data. Empirical findings indicate that the productivity of the farms in the sample increased during the period 1995-1999 and it was shaped up primarily by the input mix-effect and technical change.