Cross-Country Comparison of Efficiency in the Olive Oil Sector: Italy-Turkey

In this study, Turkish and Italian mills were compared in terms of efficiency scores and quality and environmental sensitivity. In the study, metafrontier method was used to determine efficiency scores, and indexes formed from responses obtained through questionnaires were used to determine quality and environmental sensitivities. In addition, the factors that affect the efficiency scores were determined by 1000 repeated trunceted regression analysis. The estimated efficiency scores for CCR, BCC and SCA models are respectively 74%, 80% and 93% for Turkish mills and 81%, 87% and 84% for Italian mills. It is also determined that Turkish mills and Italian mills can increase their olive oil production about 45% and 49% respectively without changing their existing inputs. When we check the factors which thought to affect the efficiency scores, we estimated that the number or partners and number of the permanent unskilled labour have negative effect and production managers experience, special training and quality index have positive effect on efficiency scores in Turkish mills. In the Italian mills, production managers experience, special training, quality index and environmental indeks, were found to have a positive effect on efficiency scores. As a result, Turkish mills have to increase their quality and environmental sensivities and decrease the number of partners, number of permanent unskilled labour for the competition of Turkish olive oil.