1

Total Factor Productivity Growth in European Agriculture

Supawat Rungsuriyawiboon and Alexej Lissitsa
*





Abstract
Malmquist total factor productivity index using the non-parametric technique of
data envelopment to fit distance functions index has been extensively applied in
the literature. This approach is nonstochastic and assumes a constant returns to
scale on the frontier technology. The advantages of this approach are that it
requires data only on quantities and provides what sources are attributed to
productivity growth. This information is very useful for policy makers in
designing suitable policies to promote the productivity of firms in the industry.
We apply this approach to measure and decompose productivity growth in
European agricultural production. The main objective of the study is to measure
and compare the levels and trends in agricultural productivity among the
European countries.

Key words: efficiency, data envelopment analysis, multifactor productivity,
European countries, agriculture




*
The authors are, respectively, a lecturer at Faculty of Economics, Chiang Mai University, Chiang Mai,
Thailand and a researcher associate at the Institute of Agricultural Development in Central and Eastern Europe
(IAMO), Germany.
Corresponding author: Faculty of Economics, Chiang Mai University, Chiang Mai, Thailand 50200, Tel: +66
53 942208, Fax: +66 53 942202, Email: sxr@eng.cmu.ac.th.
The authors wish to thank Sergey Parkhomenko for helping with the data collection. This draft was prepared
while the first author was a visiting fellow at IAMO. Financial support from Institute of Agricultural
Development in Central and Eastern Europe is acknowledged. The usual disclaimer applies.

2
1. Introduction
Agricultural productivity growth can be defined as agricultural outputs grow at a sufficiently
rapid rate to meet the growth of demands for food and raw materials arising out of steady
population growth. Researchers and policy makers are interested in measuring not only the
levels and trends in agricultural productivity but also what sources are attributed to the
agricultural productivity growth. In early studies of the measurement of productivity growth,
index number techniques were employed to construct productivity growth indices to measure
the productivity growth. However, the index approach has a disadvantage because it requires
data on prices and quantities as well as assumptions concerning the behaviour of producers
and the structure of technology. Moreover, it cannot provide what sources attributing to
productivity growth which is of broad interest of researchers. These problems lead to the
development of new empirical techniques known as non-parametric and parametric
approaches to measure the productivity growth.
With the applications on agricultural productivity, number of the empirical studies
investigating cross-country differences in agricultural productivity levels and growth rates
has expanded significantly in the past decade. This is most likely driven by different factors
like the availability of new panel data sets, such as that produced by the Food and
Agriculture Organisation (FAO) of the United Nations as well as the development of new
empirical techniques to analyse this type of data, such as data envelopment analysis and
stochastic frontier analysis, described in Coelli, Rao and Battese (1998). However, there are a
few empirical studies which have published the agricultural productivity developments in the
European countries. A good summary of the previous studies that conducted the
measurement of productivity growth in the agricultural sector is presented in Coelli and Rao
(2003).
The main purpose of this study is to measure the agricultural productivity growth in the
European counties. This study also examines the levels and trends in agricultural productivity
of transition countries and compares their agricultural productivity with the European Union
(EU) countries
1
. The transition countries are the Central and Eastern European Countries
(CEEC) and the Newly Independent States (NIS) after the breakdown of the former Soviet
Union. The transition countries began major market-oriented reform of their planned

1
The European Union (EU) was established on November 1, 1993. It is a union of 15 independent countries
based on the European Communities and founded to enhance political, economic and social co-operation. It was
formerly known as European Community (EC) or European Economic Community (EEC). Currently, there are
25 countries as the EU members. Ten new members were joined in on May 1, 2004.
3
economies in the late 1980s and early 1990s. Economic reform has transformed the structure
and volume of these countries agricultural production, consumption and trade and
introduced important agricultural productivity changes. However, there are large differences
between the transition countries in the direction and the magnitude of these changes. These
differences need to be investigated and to be compared by how far agricultural productivity
of the transition countries is from the economic standards in the European Union countries.
This study adopts a non-parametric approach of the Malmquist total factor productivity
(TFP) index to address these questions. The study is empirically implemented by using a
panel data set of the European agriculture on 44 countries over the time period of 1992-2002
to measure and compare the productivity growth among the European countries.
The remainder of this paper is organized as follows. In Section 2, the output distance
function is defined, followed by a theoretical concept of the Malmquist TFP growth
decomposition using the non-parametric approach. Section 3 discusses the data set and the
definitions of all variables used in this study. Empirical results are presented and discussed
in Section 4 and then conclusions follow in the final section.

2. Decomposition of Total Factor Productivity Growth
TFP growth is defined as the residual growth in outputs not explained by the growth in input
use. Two approaches i.e. non-parametric and parametric are extensively applied in recent
literature to measure the TFP growth. These two approaches have an advantage in
decomposing the TFP growth into its associated components. Measuring and decomposing
the components of TPF growth provide useful information about what sources are attributed
to the TFP growth. This information is very useful and helps policy makers in designing
proper policies to determine the growth.
In this study, we apply a non-parametric approach using the Malmquist TFP index presented
in Caves et al. (1982) and Fre et al. (1994) to measure the TFP growth. The Malmquist TFP
index requires the computation of linear programming problems to construct a piece-wise
linear production for each year in the sample. This approach requires that the Malmquist TFP
index is defined using distance function. The next section will define the distance function,
followed by a theoretical concept of the Malmquist TFP growth decomposition using the
non-parametric approach.

2.1 Defining a Distance Function
4
Distance function is one way of representing a well-behaved multi-input multi-output
production technology. Empirical researchers find them useful because they do not require
behavioural assumptions such as cost minimization or profit maximization. One may specify
both input and output distance functions. In this paper we define an output distance function
for total agricultural production of European countries. An output distance function is
considered instead of an input distance function because, in agricultural sector, countries tend
to expand their agricultural outputs given exogenously-determined levels of their agricultural
inputs.
Consider a data set consisting of a vector of inputs and outputs for each of the i-th country
where I i ,..., 1 = denotes a country index. Let the input and output vectors for the i-th country
be denoted ( )
N
iN i i
R x x x
+
= ,...,
1
and ( )
M
iM i i
R y y y
+
= ,...,
1
, respectively. For any input
vector
N
R x
+
and any output vector
M
R y
+
, an input vector
N
R x
+
is transformed into net
outputs
M
R y
+
by a production technology. This technology may be modelled by an input
orientation
N
R y L y
+
) ( or, conversely, by an output orientation
M
R x P x
+
) ( . ) (y L
denotes the subset of all input vector
N
R x
+
which yield at least y . Conversely, for any
N
R x
+
, ) (x P denotes the subset of all output vector
M
R y
+
obtainable from x or less than
x .
Using the output orientation, the output set ( ) x P under a constant returns to scale assumption
which satisfies the axioms presented in Fre et al (1985) is defined as
( ) x P ={y :
I
R x X Y y
+
, , },
N
R x
+
, (1)
where Y is a M I matrix of observed outputs for all I countries, X is a N I matrix of
observed inputs for all I countries and ( )
I
I
R
+
= ,...,
1
as a I 1 vector of intensity
variables indicating at what intensity weights each of the i-th country is involved in
production.
Given a cross-section data for I countries, the linear programming problem that is solved for
the i-th country in an output-orientated constant returns to scale model takes the following
form.

,
max
st Y y
i
,

i
x X , (2)
0 ,
5
where is a scalar with a value greater than or equal to one. The inverse of is used to
define a constant returns to scale technical efficiency scores of the i-th country. Technical
efficiency scores will take a value between zero and one.
Consider a specific time period, t , the production technology
t
S transforms inputs
N
t
R x
+

into net outputs
M
t
R y
+
for each time period T t ,..., 1 = . The production technology
consisting of all feasible input-output vectors is defined as
{ }
N M
t t t t t
R x f y y x S
+
+
= ) ( : , , (3)
Following Fre et al (1994), the output distance function is defined as
( ) ( ) { }
t t t t t
o
t
S y x y x D = , : min , , (4)
where ( ) 1 ,
t t
o
t
y x D if and only if ( )
t t t
S y x , . Furthermore, ( ) 1 , =
t t
o
t
y x D if and only if
( )
t t
y x , is located on the outer boundary of the feasible production set which occurs only if
production is technically efficient.

2.2 Decomposition of the Malmquist TFP Index
The Malmquist TFP index as defined by Fre et al (1994) measures the TFP change between
two data points by calculating the ratio of the distances of each data point relative to a
common technology. The output-orientated Malmquist TFP change index is given by
( )
( )
( )
( )
( )
2 / 1
1
1 1 1 1 1
1 1
,
,
,
,
, , ,

=
+
+ + + + +
+ +
t t
o
t
t t
o
t
t t
o
t
t t
o
t
t t t t o
y x D
y x D
y x D
y x D
y x y x m , (5)
which is, in fact, the geometric mean of two TFP indices. In the first term inside the bracket,
technology in period t is used as reference technology and in the second term inside the
bracket, technology of period 1 + t is used as reference technology. A value of
o
m greater
than one will indicate a TFP progress from period t to period 1 + t while a value less than
one indicates a TFP regress.
The above Malmquist TFP index can be decomposed in a way that highlights what sources
are attributed to the TFP growth. An equivalent way of writing the above Malmquist TFP
index is
( )
( )
( )
( )
( )
( )
( )
2 / 1
1 1 1 1
1 1 1 1 1
1 1
,
,
,
,
,
,
, , ,

=
+ + + +
+ + + + +
+ +
t t
o
t
t t
o
t
t t
o
t
t t
o
t
t t
o
t
t t
o
t
t t t t o
y x D
y x D
y x D
y x D
y x D
y x D
y x y x m , (6)
The first ratio outside the square brackets is called efficiency change component which
measures the change in the output-orientated measure of Farrell technical efficiency between
6
periods t and 1 + t . The efficiency change component simply compares the distances of two
observations, ( )
t t
y x , and ( )
1 1
,
+ + t t
y x , to the corresponding production frontiers
t
S and
1 + t
S .
It measures whether production is catching up with or falling behind the production frontier.
It is assumed that this component captures diffusion of technology related to differences in
knowledge and institutional setting. The remaining part of the index in equation (6) is a
measure of technical change. It is the geometric mean of the shift in technology in time t
and 1 + t at input levels
t
x and
1 + t
x . This term captures changes in technology at a national
level. Figure 1 illustrates how to define the output distances which are component of the
Malmquist TFP index decomposition. Consider the time period t and 1 + t , the observed
input-output combination is located inside the production frontier which implies the
productions are not technically efficient for both periods t and 1 + t . The output distance for
the observation at time t , relative to the production frontier
t
S , ( )
t t
o
t
y x D , , is given by the
ratio ( )
1
0 0

a b while the output distance for the observation at time 1 + t , relative to the
production frontier
1 + t
S , ( )
1 1 1
,
+ + + t t
o
t
y x D , is given by the ratio ( )
1
0 0

c d . Values of these two
output distances with respect to the same points in time are less than one. Figure 1 also
present how other required output distances with respect to two different points in time are
defined. These output distances are also component of the Malmquist TFP index. The output
distance ( )
1 1
,
+ + t t
o
t
y x D , which measures the proportional change in outputs required to make
( )
1 1
,
+ + t t
y x feasible relative to the available production frontier
t
S , is given by the ratio
( )
1
0 0

f e . Similarly, the output distance ( )
t t
o
t
y x D ,
1 +
, which measures the proportional
change in outputs required to make ( )
t t
y x , feasible relative to the available production
frontier
1 + t
S , is given by the ratio ( )
1
0 0

a f . Values of these two output distances with
respect to the different points in time are greater than one.











7
Figure 1: The Output-Orientated Malmquist TFP Index Decomposition
Under Constant Returns to Scale Production Frontier

The component distance functions in equation (6) can be measured using two approaches
such as parametric and non-parametric techniques. In this paper, we apply a non-parametric
technique to construct the Malmquist TFP index.
Given that suitable panel data are available, we must calculate four distance functions to
measure the TFP change between two periods, t and 1 + t for the i-th country. This requires
the solving of four linear programming problems, i.e. ( )
t t
o
t
y x D , , ( )
1 1 1
,
+ + + t t
o
t
y x D ,
( )
1 1
,
+ + t t
o
t
y x D and ( )
t t
o
t
y x D ,
1 +
. The value of the distance function ( )
1
,

t t
o
t
y x D at time t is
calculated as the solution of the following linear programming problem for each country
I i ,..., 1 = .
( ) [ ]
,
1
, ,
max , =

t i t i
o
t
y x D ,
st
t t t i
Y y
,


t i t t
x X
,
(7)
0
and the required linear programming problem for the distance function ( )
1 , 1 ,
,
+ + t i t i
o
t
y x D
referred to information from two different points in time takes the following form
y
S
t+1
d
S
t
x
(x
t+1
,y
t+1
) c
f
a
b
e
(x
t
,y
t
)
0
8
( ) [ ]
,
1
1 , 1 ,
max , =

+ + t i t i
o
t
y x D ,
st
t t t i
Y y
+1 ,


1 , +

t i t t
x X (8)
0
Other required linear programming problems needed to solve for the distance functions
( )
1 , 1 , 1
,
+ + + t i t i
o
t
y x D and ( )
t i t i
o
t
y x D
, , 1
,
+
are mixed-period problem. They can be calculated like
equation (7) and (8), respectively, by interchanging subscript t and 1 + t .

3. Data Discussions
A data set used in this study is adjusted for quality which measures agricultural outputs and
inputs. Data on 44 countries over the time period of 1992 through 2002 are used in the
empirical analysis. Countries selected for analysis include members of the European Union
(EU) and transition countries as well as EU possible member - Turkey
2
. Data for newly
formed countries are available only from 1992 due to break down of the USSR and
Yugoslavia in 1991. Data for Czech Republic and Slovakia start from 1993 after peaceful
separation of Czechoslovakia into separate countries in J anuary 1993 during Velvet
Revolution.
Countries are divided into three categories using the following definition. The first category
called European Union 15 countries consists of countries which founded the European
Union and countries which joined EU before 1996. The second category called European
Union 10 countries consists of countries which joined the European Union in 2004. The last
category called transition countries consists of all transition countries after the breakdown
of the former Soviet Union as well as Turkey. Above described classification is made in
order to fulfil the task of the study to compare agricultural productivity developments
between old and new members of the European Union as well as transition countries and
Turkey. Table 1 provides a list of the countries in each group.



2
In 1964, Turkey became an associate member of the European Community; over the past decade, it has
undertaken many reforms to strengthen its democracy and economy, enabling it to begin accession membership
talks with the European Union in recent years, which may bring it into EU in near future.
9
Table 1: Classification of Selected Countries
Group Country
European Union 15
*
Austria, Belgium-Luxembourg, Denmark, Finland, France,
Germany, Greece, Ireland, Italy, the Netherlands, Portugal, Spain,
Sweden, UK.
European Union 10
**
Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania,
Malta, Poland, Slovakia, Slovenia
Transition Albania, Armenia, Azerbaijan, Belarus, Bosnia-Herzegovina,
Bulgaria, Croatia, Georgia, Kazakhstan, Kyrgyzstan, Macedonia,
Moldova Republic, Romania, Russian Federation, Serbia-
Montenegro, Tajikistan, Turkey, Turkmenistan, Ukraine,
Uzbekistan
*
Countries joined the European Union before J anuary, 1995
**
Countries joined the European Union in May, 2004

The primary source of data is obtained from the website of the Food and Agricultural
Organisation (FAO) of United Nations (UNO) and, in particular, the agricultural statistics
provided by the AGROSTAT system, supported by the Statistics Division of the FAO. The
data used to measure the TFP measurement and decomposition contains the measurements of
agricultural output and input quantities. In this study, the production technology is presented
by two output variables (i.e. crop and livestock) and five input variables (i.e. land, tractor,
labour, fertilizer, and livestock). The definitions of these variables are summarised as
follows
3
:
The output series for the two output variables are derived by aggregating detailed output
quantity data on 127 agricultural commodities (115 crop commodities of average 1999-2001
and 12 livestock commodities), which are produced in the studied countries. Construction of
output data series uses the following steps. First, average aggregate for the base period 1999
to 2001 are calculated. These aggregates are constructed using output quantity data and
international average prices (expressed in US dollars) derived using the Geary-Khamis
method
4
. The next step is to extend the average base period output series 1999 to 2001 to
cover the whole study period 1992-2002. This is achieved using the FAO production index
number series for crops and livestock separately
5
.
Given the constraints on the number of input variables that could be used in the analysis,
only five input variables are considered to use in the study. Definitions of these input
variables are defined as follows. Land input variable represents the arable land, land under

3
More details on how these variables are constructed see Coelli and Rao (2003).
4
Detailed information on how international average prices are constructed see Rao (1993)
5
See the FAO STAT (FAO, 2004) for details regarding the construction of production index numbers.
10
permanent crops as well as the area under permanent pasture in hectares. Tractor input
variable represents the total number of wheel and crawler tractors, but excluding garden
tractors, used in agriculture. Labour input variable refers to economically active population in
agriculture. Following other studies (Hayami and Ruttan 1970, Fulginiti and Perrin 1997) on
inter-country comparison of agricultural productivity, fertilizer input variable represents the
sum, in nutrient-equivalent terms, the commercial use of nitrogen, potassium, and phosphate
expressed in thousands of metric tons. Livestock input variable used in the study is the
sheep-equivalent of the five categories of animals used in constructing this variable. The
categories considered are: buffaloes, cattle, pigs, sheep and goats. Numbers of these animals
are converted into sheep equivalents using conversion factors: 8.0 for buffalos and cattle; and
1.00 for sheep, goats and pigs.

4. Results
In order to calculate the Malmquist TFP index and its components (i.e. technical efficiency
change and technical change), the linear programming (LP) problems are solved on data for
44 countries over the time period of 1992 to 2002 using the data envelopment analysis
(DEA) method to construct a piece-wise linear production frontier for each year in the
sample. The DEA method can be solved using the DEAP software program (Coelli, 1996b).
The results obtained from the LP problems are organized into sections. The following section
presents the results on agricultural productivity of all European countries, followed by
comparison of the results for groups of countries according to the status of the European
Union and transition countries defined in the previous section. The next section examines the
performance of individual countries which are representative for the groups of countries.

4.1 Results for All European Countries
Application of the DEA method for purposes of Malmquist index calculations involves
solving a large number of LP problems. For our data set consisting of 44 countries over 11
years required solutions to 44[(113)-2] =1,364 LP problems. The DEA results include
thousands of pieces of information on the efficiency scores and peers of each country in each
year. In this section, we begin by presenting the results of technical efficiency scores,
following by a measure of TFP growth. The results on changes in technical efficiency can
illustrate us about the catch-up effect attributed to the TFP growth. Technical efficiency
scores for the 44 countries over the period 1992 to 2002 under the constant returns to scale
11
assumption are presented in Table 2. Technical efficiency scores range from 0.523 by
Uzbekistan to maximum 1.000with an average of 0.807. There were eight countries in this
study, i.e. Bel-Lux, France, Greece, Italy, Netherlands, Hungary, Malta and Croatia showing
perfect technical efficiency scores over the entire sample period. The average technical
efficiency score implies that the countries in this study were, on average, producing 80.7
percent of the outputs that could be potentially produced using the observed input quantities.
Some counties such as Bulgaria, Kazakhstan, Malta and Moldova Republic exhibited quite
impressive technical efficiency scores over the time period. Moldova Republic and
Kazakhstan showed perfect technical efficiency scores after the year 1997 and 1998,
respectively. An increase of their technical efficiency scores could be explained by a
decrease of their uses of fertilizers and plant-protection agents. The new ownership
conditions and the fragmentation of plots do not permit farmers to undertake the necessary
expenditures. For example, in 1991, Kazakhstan used mineral fertilizers only 2.1 percent of
its 1990 level, and organic fertilizers only 4.7 percent (United Nations Economic
Commission for Europe, 2005). The same fact could be also observed in Moldova. As 99
percent of the crops were produced without the use of fertilizers or plant-protection agents,
yields were highly depended on the natural conditions. Since 1998, however, the use of
fertilizers was increased in most of the transition countries. Malta showed perfect technical
efficiency scores over the entire period whereas Bulgaria was on the frontier over the entire
period except in 1996. However the results from Malta should be interpreted only with
caution because of the size of the country and their low part in common agricultural
production in Europe. Bulgarias agriculture, currently, according to Government figures,
generates about 12 percent of gross domestic product, and provides a livelihood for about
368,000 people and a subsidiary source of income for almost one million people. That is a
reason why the Bulgarian agricultural sector has been highly subsided by Government unlike
other transition countries. The subsidies were not covered by this analysis and this could lead
to the overestimation of its technical efficiency score.
The measure of TFP growth can be decomposed into technical efficiency- and technology-
related effects. The technical efficiency-related component explains the catch-up part of
the TFP growth whereas the technology-related component results in the frontier-shift to
the TFP growth. The proportional growth of the average technical efficiency- and
technology-related components constituting the average TFP growth for the 44 countries
over the time period of 1992 to 2002 are presented in Table 3. The TFP growth ranges from
-2.95 percent by Bosnia-Herzegovina to 13.41 percent by Kazakhstan with an unweighted
12
average of 3.06 percent. There were four countries i.e. Bosnia-Herzegovina, Cyprus, Georgia
and Serbia-Montenegro indicating productivity regress. The technical change ranges from
-0.46 percent by Cyprus to 7.67 percent by Moldova Republic with an unweighted average of
2.62 percent. All countries except Cyprus indicated technological progress. The technical
efficiency change ranges from -4.43 percent by Serbia-Montenegro to 6.03 percent by
Tajikistan with an unweighted average of 0.42 percent. Fourteen countries i.e. Armenia,
Belarus, Bosnia-Herzogovina, Bulgaria, Czech Republic, Georgia, Ireland, Kyrgyzstan,
Portugal, Serbia-Montenegro, Spain, Turkmenistan, UK and Uzbekistan indicated a decrease
of technical efficiency change. A significant decrease of the technical efficiency change in
the republics of former Yugoslavia could be simply explained by civil war while a significant
decline of the technical efficiency change in UK, in our opinion, needs a special statement.
The negative technical efficiency change in UK is correlated with BSE
6
and FMD
7
crises in
the country. Simultaneous occurrence of these diseases in England by the end of the 1990s
caused confusion among consumers about the issues and interrelationships, and the
combined costs to the UK economy have been shared by agriculture, consumers, tourism,
and trade. For example, the 1996 outbreak was followed by an immediate 40 percent decline
in sales of beef products and 26 percent decrease in households consumption of beef and
veal. The estimated costs of BSE to the UK were at over 5 billion (USDA, 2001). The
significant increase in technical efficiency change in Post-Soviet republics like Slovenia,
Kazakhstan and Soviet could be explained by a drastic reduction of the variable inputs use
like fertilizers but also machinery and livestock numbers.
The weighted average measures of the TFP growth over the period 1992-2002 are presented
in Table 4
8
. The weighted average TFP growth over the period was 3.03 percent which was
driven by 0.75 percent in technical efficiency change and 2.27 percent in technical change.
The results indicate high TFP growth during the period 1996 to 1997. The technical
efficiency effect indicated a significant decrease in 1995 and then significant increases during
the period 2000 to 2001. There was technological progress over the entire sample period with
technological regress in 1998 and 2001. Technical change had the dominant contribution in
the TFP growth. Figure 2 illustrates plots of the cumulative indices of the TFP growth and its

6
BSE - Bovine spongiform encephalopathy
7
FMD - Foot and mouth disease
8
The weighted results are measured where each country is weighted by the countrys share in total agricultural
output. A weighted average of annual growth rates is more appropriate for assessing regional and global
performance.
13
components over the period 1992 to 2002. The plot of TFP change shows agricultural
productivity progress over the entire sample period. The plot of technical efficiency change
over time indicates some regress during the period 1995 to 1996 and in 1999 and 2002, while
the plot of technical change exhibits a small technology regress in 1998 and 2001.

4.2 Comparison of the Results for Groups of the European Countries
In this section, we will compare the results from each group of the countries in order to
explain agricultural performance among the European Union and transition countries.
Average country technical efficiency scores by the group of European Union and the
transition countries are also reported in Table 2. The results indicate that the European Union
15 countries had average country technical efficiency higher than the European Union 10
countries. Average country technical efficiency scores by the transition countries were lower
than those by the European Union 15 and 10 countries in every single period. The European
Union 10 countries had higher average country technical efficiency than the European Union
15 countries during the period of 1994 to 1995 and the period of 2000 to 2002. These results
suggest during the period of 1994 to 1995 the European Union 15 countries faced unstable
changes after joining the European Union leading to lower their technical performance
whereas the European Union 10 countries had to improve their technical performance to
impress the former members in order to join the Union in the early 20-th century.
Table 5 presents productivity profiles of countries within each group. We divide countries
into five categories according to their TFP growth and what sources are attributed to their
TFP growth. All countries except Bosnia-Herzegovina, Cyprus, Georgia and Serbia-
Montenegro indicated TPF progress over the time period. TFP regress for Bosnia
Herzegovina, Georgia and Serbia-Montenegro was driven by a decline of catch-up effect
whereas TFP regress for Cyprus was driven by technological regress, what could be
explained by the civil wars in these countries in observed time period. Eight countries were
frontier countries with productivity progress. Of these countries, five countries, i.e. Belgium-
Luxembourg, France, Greece, Italy and Netherlands were located within the European Union
15 countries and two counties, i.e. Hungary and Malta were located within the European
Union 10 countries and one country, Croatia, is a transition country. There were twenty one
countries which exhibited an acceleration of catch-up effect and technological progress
leading to productivity progress over the time period. Of these countries, there were five
countries within the European Union 15 countries, six countries within the European Union
10 countries and ten countries within the transition countries. Eleven countries showed
14
technological progress but a decline of catch-up effect leading to productivity progress
over the time period. Of these countries, there were four countries within the European
Union 15 countries, one country within the European Union 10 countries and six countries
within the transition countries.
Table 6 presents weighted TFP growth rate by the group of European Union and transition
countries over the entire 1992-2002 period. Examining the growth rate by the group of
countries will allow us to explain agricultural productivity trends in the European countries
and to answer the question we raised earlier that how far agricultural productivity of the
transition countries are from the economic standards in the European Union countries. The
weighted average TFP growth grew at 2.19 percent per annum by countries within the
European Union 15 countries, 2.68 percent per annum by countries within the European
Union 10 countries, 5.10 percent per annum by the transition countries and 3.53 percent per
annum by all countries. The results exhibit that countries located within the European Union
15 countries had average annual growth of the technical and technical efficiency change
effects lower than those located within the European Union 10 and transition countries. This
result implies that countries located within the European Union 10 and transition countries
increased the outputs by improving technical efficiency more than those located within the
European Union 15 countries. TFP growth for each group of countries was mainly driven by
the technology progress. The contribution of the technical efficiency effect attributed to TFP
growth was quite small by countries located within the European Union 15 countries while
the technical efficiency effect was increased by countries located within the European Union
15 countries and the transition countries, respectively. The European Union 15 countries
showed technological regress during the period of 1992 to 1993 and also a decrease of
technical efficiency change during the period of 1997 to 2002. Technological regress could
be explained by the reconstruction in Germany while the Mad Cow decease in UK may result
in a decline of technical efficiency change. The European Union 10 countries showed a small
increase of technical efficiency change during the period of 2000 to 2002 and a modest
progress of TFP growth during the period of 1997 to 2002. These results suggest the
presence of an anticipation effect on the part of the European Union 10 countries joining the
European Union in mid 2004. Transition countries showed an increase of TFP growth over
the entire period except the period of 1994 to 1996. This TFP regress was mainly driven by a
decline of technical efficiency change. A main reason to explain the TFP regress is that
many transition countries were under war and dealt with a political instability during these
periods. Compared the TFP growth between the European Union 15 and transition countries
15
in each period, the European Union 15 countries showed a high TFP growth rate while the
TFP growth of the transition countries was low in that period and vice versa. These results
imply that an acceleration of agricultural productivity in Europe over the past decade was
driven by each group of the European countries.
Figure 3 contains a set of the cumulative index plots of the TFP growth and its associated
components by the group of the European Union and transition countries over the entire
1992-2002 period. The plot of the European Union 15 countries shows that TFP change was
closely driven by technical change. The technical change was steadily improved throughout
the period except the period of 1993 to 1994 while technical efficiency change was steadily
stable leading to TFP progress throughout the period. The plot of the European Union 10
countries shows that TFP change was closely driven by technical efficiency change in the
early 1990s and then it was closely driven by technical change afterwards while the transition
countries show that their productivity progress was mainly driven by the technical change
until 1999 and then both technical efficiency and technical change effects were attributed to
their productivity growth.

4.3 Results for Selected Countries
In this section, we present the results of TFP growth by selected countries. The countries are
selected as a representation to explain agricultural productivity for each group of countries.
We select three countries from each group. The selected countries for the European Union 15
countries consist of Austria, Germany and UK, those for the European Union 15 countries
are Hungary, Poland and Slovenia, and those for the transition countries are Russia, Turkey
and Ukraine. The unweighted TFP growth over the sample period was 2.78 percent by
Austria, 2.82 percent by Germany and 0.30 percent by UK. Austria and Germany showed
their agricultural productivity progress driven by the catch-up and frontier-shift effects
whereas UK showed its productivity progress mainly driven by technology progress with a
decline in technical efficiency change. Hungary, Poland and Slovenia indicated TFP growth
of 1.62, 2.59 and 7.21 percent, respectively. The TFP progress of Poland and Slovenia were
associated with the catch-up and frontier-shift effects whereas the TFP progress of Hungary
was only due to the frontier-shift effect. Russian, Turkey and Ukraine respectively indicated
TFP growth of 5.32, 1.70 and 5.33 percent. Russian showed the catch-up effect was mainly
attributed to its agricultural productivity progress while the frontier-shift effect was mainly
attributed to Turkeys agricultural productivity progress. On the other, both the catch-up and
frontier-shift effects were mainly attributed to Ukraines agricultural productivity progress.
16
Figure 4 contains a set of graphs which present cumulative indices of the TFP growth and its
associated components for the selected countries over the period 1992 to 2002. Austria
showed agricultural productivity progress in that technical change was steadily improved
throughout the period while technical efficiency change was steadily stable. Compared with
Germany both technical change and technical efficiency change were steadily improved
throughout the period except some technological regress in 1997 and 2001 leading to
agricultural productivity progress throughout the period. UK is an interesting case in that
technical change was steadily improved throughout the period while technical efficiency
change was steadily declined. The catch-up and frontier-shift effects were offset leading
to stagnant productivity growth throughout the period. Hungary was technically efficient in
every period so that technological progress led to its agricultural productivity progress.
Poland and Slovenia showed agricultural productivity progress in which TFP progress was
mainly driven by one dominant effect. The catch-up effect was a dominant effect to
Slovenias TFP progress. Conversely, the frontier-shift effect was a dominant effect to
Polands TFP progress. Russian Federation, Turkey and Ukraine also exhibited agricultural
productivity progress over the sample period. The catch-up effect was a dominant effect to
Russian Federations agricultural productivity progress whereas the frontier-shift effect
was a dominant effect to Turkeys agricultural productivity progress. On the other hand, both
catch-up and frontier-shift effects were predominately attributed to Ukraines
agricultural productivity progress.

5. Concluding Remarks
Malmquist TFP index using the non-parametric technique of data envelopment analysis has
become common practice to measure productivity growth and what sources attributing to the
productivity growth. This approach is applied in this study using a panel data set of the
European agriculture on 44 countries over the time period of 1992-2002. The results show
that the weighted average TFP growth in the European agriculture over the study period was
3.03 percent which was driven by 0.75 percent in technical efficiency change and 2.27
percent in technical change. The weighted average TFP growth grew at 2.19 percent per
annum by the European Union 15 countries, 2.68 percent per annum the European Union 10
countries and 5.10 percent per annum by the transition countries. TFP growth for each group
of countries was mainly driven by the technology progress. The results also indicate that the
countries within the European Union 10 countries and the transition countries had an average
country TFP growth higher than those located within the European Union 15 countries.
17
Transition countries indicated impressive frontier-shift and catch-up effects comparing
with the European Union 15 and 10 countries. Finally, the study concludes that an
acceleration of European agricultural productivity over the past decade was driven due to
agricultural productivity progress from each group of the European countries.

References
Caves, D. W., Christensen, L. R., and Diewert, W. E. (1982b). The Economic Theory of
Index Numbers and the Measurement of Input, Output and Productivity.
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Coelli, Tim J . (1996b). A Guide to DEAP Version 2.1: A Data Envelopment Analysis
(Computer) Program., CEPA Working Paper 96/08, Department of Econometrics,
University of New England, Armidale.
Coelli, T.J . and D.S.P. Rao (2003). "Total Factor Productivity Growth in Agriculture: A
Malmquist Index Analysis of 93 Countries, 1980-2000", Agricultural Economics, to
appear.
Coelli, T.J ., D.S.P. Rao and G.E. Battese (1998). An Introduction to Efficiency and
Productivity Analysis, Kluwer Academic Publishers.
Fre, R., S. Grosskopf and C.A.K. Lovell (1985). The measurement of Efficiency of
Production, Kluwer Academic Publishers, Boston.
Fre, R., S. Grosskopf, M. Norris and Z. Zhang (1994). Productivity Growth, Technical
Progress and Efficiency Changes in Industrialised Countries, American Economic
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Fulginiti, L.E. and Perrin, R.K. (1997). LDC agriculture: Nonparametric Malmquist
productivity indexes, Journal of Development Economics, 53, 373-390.
Hayami, Y. and V. Ruttan (1970). Agricultural Productivity Differences Among Countries,
American Economic Review, 40, 895-911.
Rao, D.S.P. (1993). Intercountry Comparisons of Agricultural Output and Productivity, FAO,
Rome.
USDA (2001). Agricultural Outlook / August 2001. Economic research service.
www.usda.gov.



18
Table 2: Annual Technical Efficiency Scores by Countries, 1992 to 2002
Annual Technical Efficiency Scores by Countries
Country Group 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Mean
Austria EU 15 0.621 0.628 0.696 0.672 0.637 0.675 0.684 0.670 0.638 0.676 0.661 0.660
Bel-Lux EU 15 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Denmark EU 15 0.797 0.917 0.877 0.911 0.884 0.937 0.941 0.898 0.910 0.981 0.923 0.907
Finland EU 15 0.908 0.943 0.952 0.958 0.927 0.965 0.867 0.925 0.950 0.978 0.972 0.940
France EU 15 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Germany EU 15 0.782 0.818 0.811 0.833 0.836 0.890 0.900 0.881 0.917 0.960 0.898 0.866
Greece EU 15 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Ireland EU 15 0.588 0.618 0.599 0.602 0.592 0.600 0.598 0.623 0.587 0.593 0.580 0.598
Italy EU 15 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Netherlands EU 15 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Portugal EU 15 0.622 0.595 0.600 0.610 0.570 0.535 0.511 0.579 0.578 0.551 0.583 0.576
Spain EU 15 1.000 0.996 0.892 0.767 1.000 1.000 1.000 0.994 1.000 1.000 1.000 0.968
Sweden EU 15 0.800 0.876 0.856 0.855 0.828 0.877 0.791 0.837 0.836 0.830 0.826 0.837
UK EU 15 0.804 0.742 0.750 0.728 0.734 0.729 0.720 0.666 0.654 0.646 0.661 0.712
Cyprus EU 10 1.000 1.000 0.896 1.000 0.882 0.731 0.829 0.866 0.838 0.977 1.000 0.911
Czech Rep EU 10 0.874 0.807 0.764 0.737 0.745 0.744 0.789 0.803 0.788 0.787 0.784
Estonia EU 10 0.789 0.818 0.940 0.896 0.909 0.929 0.828 0.982 0.941 1.000 1.000 0.912
Hungary EU 10 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Latvia EU 10 0.768 0.797 0.954 1.000 0.898 0.946 0.844 0.814 0.942 0.951 0.866 0.889
Lithuania EU 10 0.757 0.879 0.878 0.743 0.803 0.846 0.766 0.790 0.862 0.923 0.933 0.835
Malta EU 10 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Poland EU 10 0.741 0.846 0.699 0.731 0.764 0.730 0.736 0.783 0.818 0.799 0.803 0.768
Slovakia EU 10 0.821 0.808 0.822 0.740 0.750 0.742 0.836 0.765 0.818 0.857 0.796
Slovenia EU 10 0.500 0.565 0.654 0.650 0.681 0.705 0.757 0.687 0.742 0.791 0.882 0.692
Albania TC 0.717 0.831 1.000 1.000 1.000 1.000 0.816 0.960 0.923 0.947 0.982 0.925
Armenia TC 0.663 0.726 1.000 1.000 1.000 0.722 0.829 0.700 0.692 1.000 0.542 0.807
Azerbaijan TC 0.745 0.690 0.691 0.544 1.000 0.496 1.000 0.718 1.000 1.000 0.975 0.805
Belarus TC 0.649 0.684 0.585 0.559 0.524 0.512 0.496 0.488 0.547 0.571 0.573 0.563
Bosnia
Herzegovina TC 0.702 1.000 0.942 0.597 0.583 0.493 0.558 0.620 0.687
Bulgaria TC 1.000 0.925 1.000 1.000 0.826 1.000 1.000 1.000 1.000 1.000 1.000 0.977
Croatia TC 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Georgia TC 0.589 0.670 0.826 0.809 0.609 0.952 0.815 0.668 0.506 0.645 0.519 0.692
Kazakhstan TC 0.560 0.448 0.932 0.964 0.550 0.946 1.000 1.000 1.000 1.000 1.000 0.855
Kyrgyz Rep TC 0.944 0.847 0.666 0.583 0.495 0.596 0.762 0.654 0.716 0.859 0.777 0.718
Macedonia TC 0.490 0.577 0.570 0.590 0.750 0.687 0.666 0.827 0.724 0.653
Moldova Rep TC 0.820 1.000 0.757 0.839 0.787 1.000 1.000 1.000 1.000 1.000 1.000 0.928
Romania TC 0.650 0.818 0.786 0.765 0.681 0.841 0.774 0.909 0.732 0.919 0.752 0.784
Russian Fed TC 0.563 0.575 0.601 0.543 0.490 0.552 0.600 0.566 0.651 0.769 0.799 0.610
Serbia-Monte TC 1.000 1.000 1.000 0.807 0.676 0.652 0.678 0.625 0.576 0.761 0.608 0.762
Tajikistan TC 0.444 0.473 0.484 0.359 0.359 0.411 0.546 0.644 0.793 1.000 0.845 0.578
Turkey TC 0.755 0.677 0.782 0.675 0.739 0.681 0.774 0.727 0.766 0.726 0.771 0.734
Turkmenistan TC 0.693 0.698 0.802 0.579 0.280 0.372 0.560 0.697 0.627 0.594 0.532 0.585
Ukraine TC 0.635 0.684 0.582 0.588 0.565 0.639 0.699 0.650 0.836 0.919 0.822 0.693
Uzbekistan TC 0.609 0.598 0.617 0.478 0.529 0.458 0.481 0.472 0.533 0.509 0.464 0.523
Mean EU15 0.852 0.867 0.860 0.853 0.858 0.872 0.858 0.862 0.862 0.873 0.865 0.862
Mean EU10 0.819 0.860 0.864 0.861 0.841 0.838 0.825 0.855 0.871 0.905 0.913 0.859
Mean TC 0.724 0.741 0.768 0.719 0.684 0.718 0.759 0.737 0.753 0.830 0.765 0.744
Mean 0.788 0.811 0.820 0.793 0.775 0.794 0.805 0.804 0.815 0.861 0.830 0.807
19
Table 3: Unweighted Average Annual Productivity and Its Components by Each Country
Average Annual (%)
Country Group
Efficiency
Change
Technical
Change
TFP
Change
Austria EU 15 0.56 2.19 2.78
Bel-Lux EU 15 0.00 2.56 2.56
Denmark EU 15 1.34 2.27 3.65
Finland EU 15 0.62 1.18 1.81
France EU 15 0.00 2.92 2.92
Germany EU 15 1.26 1.54 2.82
Greece EU 15 0.00 1.37 1.37
Ireland EU 15 -0.13 1.38 1.26
Italy EU 15 0.00 1.38 1.38
Netherlands EU 15 0.00 1.00 1.00
Portugal EU 15 -0.58 1.81 1.21
Spain EU 15 0.00 1.59 1.58
Sweden EU 15 0.27 1.25 1.54
UK EU 15 -1.75 2.08 0.30
Cyprus EU 10 0.00 -0.46 -0.45
Czech Rep EU 10 -2.14 2.26 0.06
Estonia EU 10 2.18 1.53 3.76
Hungary EU 10 0.00 1.62 1.62
Latvia EU 10 1.10 2.14 3.26
Lithuania EU 10 1.91 2.55 4.52
Malta EU 10 0.00 5.79 5.79
Poland EU 10 0.75 1.83 2.59
Slovakia EU 10 0.40 3.09 3.51
Slovenia EU 10 5.31 1.81 7.21
Albania TC 2.90 6.70 9.80
Armenia TC -1.81 5.71 3.79
Azerbaijan TC 2.49 5.01 7.63
Belarus TC -1.12 2.90 1.75
Bosnia Herzegovina TC -4.26 1.37 -2.95
Bulgaria TC -0.01 4.85 4.84
Croatia TC 0.00 2.58 2.58
Georgia TC -1.14 0.37 -0.77
Kazakhstan TC 5.42 7.58 13.41
Kyrgyz Rep TC -1.76 4.20 2.36
Macedonia TC 2.08 1.03 3.12
Moldova Rep TC 1.82 7.67 9.63
Romania TC 1.34 2.94 4.32
Russian Fed TC 3.23 2.05 5.32
Serbia-Monte TC -4.43 3.79 -0.82
Tajikistan TC 6.03 0.05 6.08
Turkey TC 0.18 1.51 1.70
Turkmenistan TC -2.36 3.23 0.79
Ukraine TC 2.38 2.88 5.33
Uzbekistan TC -2.42 3.03 0.54
Mean EU15 0.11 1.75 1.87
Mean EU10 0.93 2.21 3.16
Mean TC 0.39 3.45 3.85
Mean 0.42 2.62 3.06
20
Table 4: Weighted Annual Average TFP Change and Its Associated Components
(in percentage)


Year
Efficiency
Change
Technical
Change
TFP
Change
1993 1.307 0.640 1.946
1994 0.268 2.711 2.984
1995 -4.164 5.729 1.303
1996 -0.379 6.194 5.791
1997 3.411 1.876 5.360
1998 2.853 -0.640 2.190
1999 -1.290 4.550 3.204
2000 3.970 0.550 4.553
2001 3.907 -0.466 3.409
2002 -1.318 4.104 2.740
Mean 0.748 2.268 3.031































21
Table 5: Productivity Profile by Each Country (in percentage)
Group Country
Efficiency
Change
Technical
Change
TFP
Change
Frontier countries with productivity progress
EU 15 Bel-Lux 0.000 2.561 2.561
EU 15 France 0.000 2.918 2.918
EU 15 Greece 0.000 1.370 1.370
EU 15 Italy 0.000 1.383 1.383
EU 15 Netherlands 0.000 1.003 1.003
EU 10 Hungary 0.000 1.616 1.616
EU 10 Malta 0.000 5.789 5.789
TC Croatia 0.000 2.579 2.579
Countries with productivity progress due to efficient improvement and technical progress
EU 15 Austria 0.560 2.195 2.780
EU 15 Denmark 1.344 2.272 3.651
EU 15 Finland 0.623 1.178 1.815
EU 15 Germany 1.264 1.540 2.825
EU 15 Sweden 0.269 1.248 1.537
EU 10 Estonia 2.179 1.529 3.763
EU 10 Latvia 1.102 2.139 3.259
EU 10 Lithuania 1.909 2.554 4.518
EU 10 Poland 0.751 1.828 2.591
EU 10 Slovakia 0.398 3.085 3.508
EU 10 Slovenia 5.313 1.814 7.214
TC Albania 2.898 6.705 9.798
TC Azerbaijan 2.487 5.007 7.634
TC Kazakhstan 5.421 7.577 13.411
TC Macedonia 2.081 1.025 3.123
TC Moldova Rep 1.817 7.666 9.632
TC Romania 1.339 2.938 4.320
TC Russian Fed 3.231 2.048 5.317
TC Tajikistan 6.029 0.053 6.077
TC Turkey 0.180 1.509 1.700
TC Ukraine 2.379 2.883 5.328
Countries with productivity progress due to technical progress but efficient declining
EU 15 Ireland -0.127 1.381 1.262
EU 15 Portugal -0.583 1.814 1.214
EU 15 Spain -0.003 1.594 1.583
EU 15 UK -1.750 2.083 0.304
EU 10 Czech Rep -2.141 2.259 0.063
TC Armenia -1.814 5.709 3.789
TC Belarus -1.117 2.898 1.750
TC Bulgaria -0.006 4.849 4.838
TC Kyrgyz Rep -1.762 4.197 2.361
TC Turkmenistan -2.363 3.228 0.794
TC Uzbekistan -2.425 3.026 0.542
Countries with productivity regress due to technical regress
EU 10 Cyprus 0.003 -0.455 -0.452
Countries with productivity regress due to efficient declining
TC Bosnia Herzegovina -4.256 1.369 -2.952
TC Georgia -1.137 0.371 -0.775
tc Serbia-Monte -4.431 3.785 -0.821
22
Table 6: Weighted Growth Rates of TFP and Its Associated Components by Country Group
Growth Rate %, 1992-2002
Group Year
Efficiency
Change
Technical
Change
TFP
Change
EU15 1992-1993 0.27 -1.08 -0.82
EU15 1994-1996 0.45 2.99 3.48
EU15 1997-1999 -0.32 2.54 2.20
EU15 2000-2002 -0.08 0.88 0.80
EU15 1992-2002 0.10 2.07 2.19

EU10 1992-1993 3.65 -0.50 3.12
EU10 1994-1996 0.84 2.71 3.60
EU10 1997-1999 1.42 0.47 1.92
EU10 2000-2002 0.04 2.47 2.53
EU10 1992-2002 0.44 2.13 2.68

TC 1992-1993 0.40 2.03 2.44
TC 1994-1996 -4.69 5.58 0.09
TC 1997-1999 1.35 -0.18 1.16
TC 2000-2002 2.31 1.44 3.83
TC 1992-2002 1.53 3.06 5.10

ALL 1992-1993 0.65 0.32 0.97
ALL 1994-1996 -1.51 4.09 2.39
ALL 1997-1999 0.51 1.29 1.82
ALL 2000-2002 0.85 1.21 2.08
ALL 1992-2002 0.78 2.54 3.53











23
Figure 2: Cumulative Indices of Technical Efficiency Change, Technical Change
and TFP Change, 1992 to 2002
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Year
I
n
d
e
x
Efficiency Change Technical Change TFP Change













24
Figure 3: Cumulative Indices of Technical Efficiency Change, Technical Change
and TFP Change by Groups of the Countries, 1992 to 2002


European Union 15
0.90
1.00
1.10
1.20
1.30
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Year
Ind
ex
Eff Change Tech Change TFP Change

Eur opean Union 10
0.90
1.00
1.10
1.20
1.30
1.40
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Year
I
n
d
e
x
Eff Change Tech Change TFP Change
Tr ansit ion
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
1.60
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Year
I
n
d
e
x
Eff Change Tech Change TFP Change










25
Figure 4: Cumulative Indices of Technical Efficiency Change, Technical Change and TFP
Change by Selected Countries, 1992 to 2002
Aust r ia
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Year
I
n
d
e
x
EC TC TFPC

Ger many
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Year
I
n
d
e
x
EC TC TFPC
UK
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Year
I
n
d
e
x
EC TC TFPC
(a) European Union 15 Countries
Hungar y
0.90
1.00
1.10
1.20
1.30
1.40
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Year
I
n
d
e
x
EC TC TFPC

Poland
0.90
1.00
1.10
1.20
1.30
1.40
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Year
I
n
d
e
x
EC TC TFPC
Slovenia
0.80
1.00
1.20
1.40
1.60
1.80
2.00
2.20
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Year
I
n
d
e
x
EC TC TFPC
(b) European Union 10 Countries
Russian
0.80
1.00
1.20
1.40
1.60
1.80
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Year
I
n
d
e
x
EC TC TFPC

Tur key
0.80
0.90
1.00
1.10
1.20
1.30
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Year
I
n
d
e
x
EC TC TFPC
Ukr ain
0.80
1.00
1.20
1.40
1.60
1.80
2.00
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Year
I
n
d
e
x
EC TC TFPC
(c) Transition Countries