Estimation of a non-neutral stochastic frontier production function
- 875 Downloads
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.
Unable to display preview. Download preview PDF.
- Aigner, D.J., C.A.K. Lovell, and P. Schmidt. (1977). “Formulation and Estimation of Stochastic Frontier Production Function Models,”Journal of Econometrics, 21–37.Google Scholar
- Chen, Tain-jy, and De-Piao Tang. (1987). “Comparing Technical Efficiency Between Import-Substituting-Oriented and Export-Oriented Foreign Firms in a Developing Economy.”Journal of Development Economics, 26, 227–89.Google Scholar
- Dempster, A.P., N.M. Laird and D.B. Rubin. (1977). “Maximum Likelihood from Incomplete Data Via the EM Algorithm.”Journal of Royal Statistical Society, Series B, 39, 1–22.Google Scholar
- Huang, C.J. (1984). “Estimation of Stochastic Frontier Production Function and Technical Inefficiency via the EM Algorithm.Southern Economic Journal, 847–56.Google Scholar
- Jondrow, J., C.A.K. Lovell, I.S. Materov and P. Schmidt. (1982). “On the Estimation of Technical Inefficiency in the Stochastic Frontier Production Function Model.”Journal of Econometrics, 233–38.Google Scholar
- Lee, Lung-Fei. (1983). “On Maximum Likelihood Estimation of Stochastic Frontier Production Models.Journal of Econometrics, 269–74.Google Scholar
- Meeusen, W. and J. van den Broeck. (1977). “Efficiency Estimation from Cobb-Douglas Production Function with Composed Error.”International Economic Review, 1977, 435–44.Google Scholar
- Wan, Guang H. and George E. Battese. (1992). “A Stochastic Frontier Production Function Incorporating Flexible Risk Properties.” Working Paper, Department of Econometrics, University of New England, June 1992.Google Scholar