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.