Efficiency and productivity of the Mongolian livestock sector in an open economy

In the early 1990s. Mongolia initiated a transition from a command to a market economy; accordingly; significant changes took place in the livestock sector, including decollectivization, privatization, and greater exposure to international trade. Taking into account these changes, this study measures technical efficiency and its sources- including trade openness-of the Mongolian livestock sector by using a stochastic production frontier model on province-level panel data for the period 2001-2011, Furthermore, we measure and decompose changes in total factor productivity (TFP) by using the results from the stochastic frontier analysis and the Malmquist TFP index, Our results suggest that trade openness is one of the most important determinants increasing efficiency of the sector, in addition to herd size and access to electricity. TFP increased during 2001-2011. but at a decreasing rate. The technical change was progressive until 2009. but turned regressive afterwards, suggesting a pressing need for technical improvements in the sector.