Journal of Productivity Analysis

, Volume 5, Issue 2, pp 171–180

Estimation of a non-neutral stochastic frontier production function

Authors

  • Clief J. Huang
    • Department of EconomicsVanderbilt University
  • Jin-Tan Liu
    • Department and Graduate Institute of EconomicsNational Taiwan University
    • Institute of EconomicsAcademia Sinica
Article

DOI: 10.1007/BF01073853

Cite this article as:
Huang, C.J. & Liu, J. J Prod Anal (1994) 5: 171. doi:10.1007/BF01073853

Abstract

This article proposed a hybrid of a stochastic frontier regression. The proposed model and estimation differ from the conventional model of Aigner, Lovell, and Schmidt. The model combines a stochastic frontier regression and a truncated regression to estimate the production frontier with non-neutral shifting of the average production function. The truncated regression identifies the sources of efficiency. The article presents empirical evidence of non-neutral effects of the firm's characteristics—the age of the firms, the export ratio, and the R&D expenditure—on the frontier production function and production efficiency in the Taiwan's electronics industry.

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© Kluwer Academic Publishers 1994