Agglomeration externalities and technical efficiency: An empirical application to the pond aquaculture of Pangas and Tilapia in Bangladesh

TY - JOUR

T1 - Agglomeration externalities and technical efficiency

T2 - An empirical application to the pond aquaculture of Pangas and Tilapia in Bangladesh

AU - Rahman, Md Takibur

AU - Nielsen, Rasmus

AU - Khan, Md Akhtaruzzaman

PY - 2019/4/3

Y1 - 2019/4/3

N2 - This article analyzes the effects of agglomeration externalities on productivity and efficiency by applying a stochastic production frontier model with a technical inefficiency model to the aquaculture industry. Agglomeration externalities refer to the costs and benefits to firms from clustering. Agglomeration studies within aquaculture have focused on the intensive salmon industry, whereas this study focuses on low-technology, extensive pond aquaculture, representing most farmers in the developing world and using Bangladesh as an empirical case. The results show that there is a positive externality effect of regional industry size on the production possibility frontier and a negative effect on technical efficiency. Farm density enhances efficiency and the farm proximity to output markets decreases efficiency. Thus, policies aimed at increasing aquaculture pond production in developing countries should consider farm locations and their access to input and output markets, all of which affect farm productivity and efficiency.

AB - This article analyzes the effects of agglomeration externalities on productivity and efficiency by applying a stochastic production frontier model with a technical inefficiency model to the aquaculture industry. Agglomeration externalities refer to the costs and benefits to firms from clustering. Agglomeration studies within aquaculture have focused on the intensive salmon industry, whereas this study focuses on low-technology, extensive pond aquaculture, representing most farmers in the developing world and using Bangladesh as an empirical case. The results show that there is a positive externality effect of regional industry size on the production possibility frontier and a negative effect on technical efficiency. Farm density enhances efficiency and the farm proximity to output markets decreases efficiency. Thus, policies aimed at increasing aquaculture pond production in developing countries should consider farm locations and their access to input and output markets, all of which affect farm productivity and efficiency.

KW - Agglomeration externalities

KW - Bangladesh

KW - pond aquaculture

KW - productivity

KW - technical efficiency

U2 - 10.1080/13657305.2018.1531948

DO - 10.1080/13657305.2018.1531948

M3 - Journal article

AN - SCOPUS:85063643305

SN - 1365-7305

VL - 23

SP - 158

EP - 187

JO - Aquaculture Economics and Management

JF - Aquaculture Economics and Management

IS - 2

ER -