This paper presents a procedure for measuring technical and allocative inefficiency in an input distance function framework. The procedure involves solving a system of equations to compute the unobserved cost minimizing input vector that is used to compute the cost of allocative inefficiency....

This paper considers the estimation of Kumbhakar et al. (J Prod Anal. doi:<ExternalRef> <RefSource>10.1007/s11123-012-0303-1</RefSource> <RefTarget Address="10.1007/s11123-012-0303-1" TargetType="DOI"/> </ExternalRef>, <CitationRef CitationID="CR30">2012</CitationRef>) (KLH) four random components stochastic frontier (SF) model using MLE techniques. We derive the log-likelihood function of the model using results from the closed-skew normal...</citationref></refsource></externalref>

This paper deals with estimation of a production technology where endogeneous choice of input and output variables is explicitly recognized. In particular, we assume that producers maximize return to the outlay (RO). For simplicity and tractability we start with a Cobb–Douglas transformation...

The paper analyzes labor-use efficiency and employment elasticity in China’s manufacturing sector by applying a stochastic input distance function to the panel data of twenty-eight Chinese manufacturing industries relative to 1999-2008. The outcome is a labor-use efficiency rate ranging from...

This paper analyzes the impact of Research and Development (R&D) on the productivity of China's high technology industry. In order to capture important differences in the effect of R&D on output that arise from geographic and socioeconomic differences across three major regions in China, we use...

This paper deals with the estimation of efficiency in a panel data framework. A oneway error component model (ECM) is generalized to accommodate firm-specific variances for the inefficiency component. A multi-step procedure is developed to estimate the cost function and predict increase in cost...

Estimation of technical efficiency is widely used in empirical research using both cross-sectional and panel data. Although several stochastic frontier models for panel data are available, only a few of them are normally applied in empirical research. In this article we chose a broad selection...