The objective of our paper is therefore to assess the effects of agglomeration externalities on the technical efficiency of French pig farms. This paper employs the non-parametric Data Envelopment Analysis (DEA), and in a second-stage truncated regression the impact of
agglomeration externalities based on theoretical
expectations is investigated. Using data about pig activity for 899
French farms in 2004, our results showed that farm
technical efficiency is as much increased by
concentration as it is the case for other businesses.
Reasons may be knowledge spillovers, labor force
matching and proximity to upstream and downstream
market. By contrast, the analysis did not reveal any
constrain due to increased land demand following the
environmental regulation.