This study aims to examine total factor productivity (TFP) and its determinants in offshore fisheries under the worsening fishing environment and to propose policy improvement based on the estimation results. We identified a decline in TFP of offshore fisheries from 2012 to 2020 employing the global Malmquist productivity index (GMPI), with the primary cause being the regression of the production possibility frontier due to the reduction of fishery resources. Moreover, utilizing the system generalized method of moments (GMM), we found that the determinants, such as the cessation of operations in Japan’s EEZ, vessel age, fishing experience, and oil prices, contribute to a decrease in the TFP of offshore fisheries. Therefore, this study suggests implementing a total allowable catch (TAC)-centered fishery resource management policy, along with reducing loan interest rates and extending the repayment period for the vessel modernization project. Furthermore, it is necessary to improve the TFP of offshore fisheries by providing regular training for fishermen, implementing the tax-free petroleum stockpiling project, and developing alternative fishing grounds.

This study is to estimate the recent changes in total factor productivity of 15 Korean adjacent water fisheries based on Malmquist productivity indices. The study adopted both input and output oriented productivity measures utilizing a hyperbola distance function. In addition to this point, the study also calculated the 95% confidence interval for the various components of the productivities in order to access the statistical significance of estimates using 2000 times of re-sampling process through the smoothed bootstraping. The results of the study showed us that there was 18% reduction in the overall total factor productivity during the study period from 2007 to 2011, which turned out to be 5% of annual decrease in productivity. The study found that the main reason of this decrease in total productivity is about 22% downward shift of a fisheries production function due to recent conditions of a devastated fishing ground. When we evaluated the statistical significance of changes in technical efficiency combining both pure technical and scale efficiency based on the 95% confidence intervals, we could not find any evidence of changes in those components of total factor productivity. When we accessed the productivity of the each of 15 adjacent water fisheries methods, only the large danish seine fisheries showed us about 7% increase in productivity. Even though the large trawling and the large tow-boat trawling revealed no changes in productivity, all of the other 12 fisheries suffered the decreases in productivities.