 ESTIMATING TECHNICAL INEFFICIENCY: AN EMPIRICAL APPROACH TO EU INDUSTRIESAikaterini Kokkinou (aikaterinikokkinou@gmail.com) Regional Science Inquiry, 2010, vol. II, issue 2, 95-104 Abstract: This paper estimates, incorporating a Transcendental Logarithmic Production Function, the technical efficiency level of different industries in selected E.U. countries. The paper considers panel data for inefficiency effects in stochastic production frontier based on Battese and Coelli (1995), providing translog effects, as well as industry effects. The empirical model accommodates not only heteroscedasticity but also allows the possibility that an industry may not always produce the maximum possible output, given the inputs. Unlike most studies, the paper estimates time – varying technical efficiencies (incorporating „learning – by doing? behaviour) as industry-specific fixed effects. Furthermore, the model decomposes total factor productivity (TFP) growth into two components: technological growth (essentially, a shift of production possibility frontier, set by best-practice enterprises) and inefficiency changes (i.e., deviations of actual output level from the production possibility frontier). Keywords: Efficiency; Technical Inefficiency; Stochastic Frontier Model (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hrs:journl:v:ii:y:2010:i:2:p:95-104 Access Statistics for this article Regional Science Inquiry is currently edited by Dr Christos Ap. Ladias More articles in Regional Science Inquiry from Hellenic Association of Regional Scientists |
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