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Productivity Growth in the Shrimp Farming Industry of Bangladesh: A Luenberger Productivity Indicator Approach

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  • Shrimp aquaculture is one of the fastest growing economic activities in the coastal areas of Bangladesh and earns substantial foreign exchange for the country. However, the environmental degradation is a major concern for the sustainable development of this industry. This paper studies the tradeoffs between the economic and environmental performance of shrimp farming in terms of productivity measurement. A directional distance function approach is employed to estimate the Luenberger total factor productivity indicators under the assumptions of weak and strong disposability of undesirable outputs. Based on average farm level data from shrimp farming, this study estimates the productivity change between the year 2000 and 2010 and compares how the different directional vectors and output sets influence the productivity. The Luenberger indicators are further decomposed into efficiency change and technical change components to explain the source of productivity change. The results show that overall the productivity of shrimp farms has decreased in most districts, except Coxs' Bazar and Chittagong districts. For most of the farms, the negative productivity growth was driven by the negative technological change. The productivity growth is an indication of sustainable development. Therefore, true productivity growth including economic and environmental performance needs to be considered in developing effective policy measures to attain sustainable development of the shrimp farming industry.
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  • Jahan, Hasneen and T. Ancev. 2014. Productivity Growth in the Shrimp Farming Industry of Bangladesh: A Luenberger Productivity Indicator Approach.In: Towards ecosystem based management of fisheries: what role can economics play?: Proceedings of the Seventeenth Biennial Conference of the International Institute of Fisheries Economics and Trade, July 7-11, Brisbane, Australia. Comlied by Ann L. Shriver and Melissa Errend. International Institute of Fisheries Economics and Trade (IIFET), Corvallis, 2014.
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  • Fisheries Research & Development Corporation, World Wildlife Fund, MG Kailis Group, AquaFish Innovation Lab, NOAA Fisheries, The European Association of Fisheries Economists, Japan International Fisheries Research Society, United Nations University, NORAD
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