Assessing the Impact of Changing Economic Environment on Productivity Growth: The Case of the Spanish Dairy Processing Industry

This article analyzes the productivity growth of the Spanish dairy processing industry from 1996 till 2011, which concerns the period of increased EU regulation regarding food safety as well as economic crisis. Data envelopment analysis is used to compute the Malmquist index and its components. The results suggest that productivity on average declined during the period under investigation. The decomposition of the Malmquist index finds that technical regress contributed to productivity decline despite improvements in technical and scale efficiencies. Our results also suggest that food safety regulations did not have a negative impact on productivity growth. Technical change and scale efficiency change made significant negative contributions to productivity growth in the period under crisis, whereas firms significantly improved their technical efficiency in that period.