Technical efficiency of olive oil firms under the industrial upgrading programme in Tunisia

This paper investigates firm-level technical efficiency of olive oil producers in Tunisia under the industrial upgrading programme (programme de mise a niveau: PMN). Using a sample of 113 olive oil firms, the translog type of stochastic frontier production function was estimated. Results suggest that the introduction of modern technology, employment of management staff and in-house production of olives contribute to improved technical efficiency. These results confirm the pertinence of the PMN which promotes the use of modern technologies and the introduction of the continuous chains system for olive oil extraction; however, development of in-house production of olives could contribute to improving quality of olive oil product.