Productivity growth of Spanish tourist wineries using a directional distance approach

Abstract

This paper analyses, in a two-step procedure, the productivity growth of 69 Spanish wineries (period 1998-2022) which offer tourism activities at their installations. To do so, we firstly calculate the total factor productivity (TFP) change using a directional distance function (DDF) and the Luenberger-Hicks-Moorsteen (LHM) TFP indicator introduced by Ang and Kerstens (2017), which allows us to correctly distinguish between technological change (TC), technical inefficiency change (TINC) and scale inefficiency change (SINC). Although a high efficiency is found in median terms, productivity decreased during the period in cumulative terms. This is explained by two contrasting forces: a positive TINC and SINC, and a negative TC. In a second step, we analyse the effect of some factors on TFP change and its components using a dynamic panel data model. Several practical implications are proposed based on these outcomes.