We analyze the profit efficiency of the Colombian banking industry during the period 2001 - 2013. Unlike previous studies, we estimate revenue and cost efficiency separately and then compute profit efficiency as a composite measure of both cost and revenue efficiency. This approach overcomes the...

This study was carried out to analyse the technical efficiency of micro-enterprises in the Nigerian economy, using cross-sectional data collected on micro-enterprises selected from block-making, metal-fabricating and sawmilling enterprises in the three geographical regions (north, southwest and...

We extend the emerging literature on spatial frontier models in three respects. Firstly, we account for latent heterogeneity by developing a maximum likelihood random effects spatial autoregressive (SAR) stochastic frontier model. Secondly, to analyze the finite sample properties of a spatial...

In the stochastic frontier model, we extend the multivariate probability statements of Horrace (J Econom, 126:335-354, 2005) to calculate the conditional probability that a firm is any particular efficiency rank in the sample. From this, we construct the conditional expected efficiency rank for...

This article offers a methodology to address the endogeneity of inputs in the input distance function (IDF) formulation of the production processes. We propose to tackle endogenous input ratios appearing in the normalized IDF by considering a flexible (simultaneous) system of the IDF and the...

The stochastic frontier analysis (Aigner et al., 1977, Meeusen and van de Broeck, 1977) is widely used to estimate individual efficiency scores. The basic idea lies in the introduction of an additive error term consisting of a noise and an inefficiency term. Most often the assumption of a...

This paper proposes a stochastic frontier panel data model which includes time-invariant unobserved heterogeneity along with the efficiency effects. Following Paul and Shankar (2018), the efficiency effects are specified by a standard normal cumulative distribution function of exogenous...

In presence of panel data, technical efficiency is used to compare the performances of Decision-Making Units (DMUs). The novelty of this paper is the consideration of the dependence between the two error terms in the case of panel data and the introduction of time effect models in the Stochastic...

This study explores the reduction potential of greenhouse gases for major pollution emitting countries of the world using nonparametric productivity measurement methods and directional distance functions. In contrast to the existing literature we apply optimization methods to endogenously...

The use of price instruments is often advocated by economists, based on their ability to bring about marginal abatement cost equalisation, and hence to achieve targets at least cost. We use the EU ETS as a case study and test this theoretical prediction. We parametrically estimate separate...