Input interactions and structural dynamics in Greek agriculture productivity

This study examines the impact of fixed capital, variable inputs, and labor on agricultural output in Greece from 1981 to 2021 using a Cobb-Douglas equation. It also investigates changes over time through the Bai-Perron structural changes method, confirming a structural break in 2006. From 1981 to 2005, labor and fixed capital had positive elasticities, contributing positively to agricultural production but with decreasing returns to scale. Post-2006, labor and fixed capital exhibited negative elasticities, indicating inefficiencies, while variable inputs retained positive elasticity. This shift suggests an increased influence of variable inputs on production after 2006. The findings highlight the need for continuous monitoring and analysis of agricultural factors to enhance sector competitiveness and sustainability, providing insights for policy design and implementation aimed at agricultural development.