Group-specific stochastic production frontier models with parametric specifications

Young Hoon Lee ()

European Journal of Operational Research, 2010, vol. 200, issue 2, pages 508-517

Abstract: This paper develops a stochastic frontier model that not only focuses more on group-specific temporal variations in technical efficiency rather than individual temporal variations, but also allows for a parametric function of the time-varying coefficient of the efficiency factor. We derived the concentrated least squares estimator and its asymptotic properties. When applied to the Penn World data set, the group-specific models yield much more variation in the temporal patterns of efficiency across countries. This application demonstrates the feasibility of applying a group-specific stochastic frontier model with a parametric function of temporal pattern to a real empirical analysis.

Keywords: Group-specific; temporal; pattern; Panel; data; Stochastic; frontiers; Time-varying; technical; efficiency (search for similar items in EconPapers)
Date: 2010

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Persistent link: http://EconPapers.repec.org/RePEc:eee:ejores:v:200:y:2010:i:2:p:508-517

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