Stochastic DEA can deal effectively with noise in the non-parametric measurement of efficiency but unfortunately formal statistical inference on efficiency measures in not possible. In this paper, we provide a Bayesian approach to the problem organized around simulation techniques that allow for...

The paper examines the convergence properties of productivity in fifteen European countries over the period 1960-1997. Empirical tests are performed for the "Maastricht proposition," according to which nominal convergence in rates of inflation is a prerequisite for real convergence. Modern...

Standard stochastic frontier models estimate log-linear specifications of production technology, represented mostly by production, cost, profit, revenue, and distance frontiers. We develop a methodology for stochastic frontier models of count data allowing for technological and inefficiency...

The paper introduces a new dynamic frontier model that is used to analyze the impact of both ownership and regulation on airport technical and allocative efficiencies. We differentiate between the short and long-term effects. Based on a large sample of international airports, we find in the...

This paper studies the diffusion of knowledge and its consequences for local innovation production. In a common framework, we analyze the geographic reach of different channels of knowledge flows that thus far have been studied separately in the literature. To jointly estimate these flows, we...

SUMMARY This paper considers a panel data stochastic frontier model that disentangles unobserved firm effects (firm heterogeneity) from persistent (time‐invariant/long‐term) and transient (time‐varying/short‐term) technical inefficiency. The model gives us a four‐way error component...

This paper examines the performance of European banks during the pre-crisis and post-crisis periods, both in terms of technical and allocative efficiencies. We use an innovative Bayesian dynamic frontier model that: (1) distinguishes between short-run and long-run performance; and (2) provides...

The efficiency of a marginal likelihood estimator where the product of the marginal posterior distributions is used as an importance sampling function is investigated. The approach is generally applicable to multi-block parameter vector settings, does not require additional Markov Chain Monte...

This paper reconsiders the formal estimation of bank risk using the variability of the profit function. In our model, point estimates of the variability of profits are derived from a model where this variability is endogenous to other bank characteristics, such as capital and liquidity. We...