A Metafrontier Production Function for Estimation of Technical Efficiencies and Technology Gaps for Firms Operating Under Different Technologies

George Battese (), D.S. Prasada Rao () and Christopher O'Donnell

Journal of Productivity Analysis, 2004, vol. 21, issue 1, 103 pages

Abstract: This paper presents a metafrontier production function model for firms in different groups having different technologies. The metafrontier model enables the calculation of comparable technical efficiencies for firms operating under different technologies. The model also enables the technology gaps to be estimated for firms under different technologies relative to the potential technology available to the industry as a whole. The metafrontier model is applied in the analysis of panel data on garment firms in five different regions of Indonesia, assuming that the regional stochastic frontier production function models have technical inefficiency effects with the time-varying structure proposed by Battese and Coelli (1992). Copyright Kluwer Academic Publishers 2004

Keywords: metafrontier; technical efficiency; technology gap; Indonesia garment industry (search for similar items in EconPapers)
Date: 2004
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DOI: 10.1023/B:PROD.0000012454.06094.29

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