This paper proposes a stochastic frontier panel data model in which unit-specific inefficiencies are spatially correlated. In particular, this model has simultaneously three important features: i) the total inefficiency of a productive unit depends on its own inefficiency and on the inefficiency...

We consider estimation of a panel data model where disturbances are spatially correlated in the cross-sectional dimension, based on geographic or economic proximity. When the time dimension of the data is large, spatial correlation parameters may be consistently estimated. When the time...

In this paper we merge techniques from the efficiency literature with spatial econometric techniques. In particular, we combine calculation of efficiency from the unit speci c effects with the spatial lag model to develop a spatial autoregressive frontier model for panel data. Features of the...

By integrating Battese and Coelli’s (1995) model and the spatial autoregressive model (SAR), a spatial autoregressive stochastic frontier model for panel data is developed. The main feature of this frontier model is a spatial lag term of explained variables and the joint structure of a...