Managerial ability and productivity growth in the European forest sector

This paper aims to examine how the data envelopment analysis (DEA) technique can be applied to evaluate managerial ability and productivity growth for 29 European forest sectors over the period 2011–2020. Toward this end, we first applied DEA to evaluate the technical efficiency (TE) from both periodical-frontier and met-frontier perspectives in which results showed that the average TE was 0.645 and the annual operating efficiency of the years studied was reduced by 35%. A modified regression test is secondly developed in order to determine the effect of contextual variables on the log of TE. The findings showed that the regional density, time series and gross domestic product had the highest positive influence on improving the TE results, respectively. In the following, by considering the explanatory variables, a modified DEA-based Malmquist productivity index is used to calculate the productivity growth over the period 2011–2020. The results indicated that there was a decline of 12% for total factor productivity in 2019–2020 compared to 2014–2015 and 7% compared to 2015–2016 which is due to the uniform growth of technological change (TC) and efficiency change recession compared to previous periods. Hence, productivity growth is mainly due to frontier shift (TC).