A semiparametric stochastic input distance frontier model with application to the Indonesian banking industry

Kai Sun and Ruhul Salim

Journal of Productivity Analysis, 2020, vol. 54, issue 2, No 4, 139-156

Abstract: Abstract This paper proposes a semiparametric smooth-varying coefficient input distance frontier model with multiple outputs and multiple inputs, panel data, and determinants of technical inefficiency for the Indonesian banking industry during the period 2000 to 2015. The technology parameters are unknown functions of a set of environmental factors that shift the input distance frontier non-neutrally. The computationally simple constraint weighted bootstrapping method is employed to impose the regularity constraints on the distance function. As a by-product, total factor productivity (TFP) growth is estimated and decomposed into technical change, scale component, and efficiency change. The distance elasticities, marginal effects of the environmental factors on the distance elasticities, temporal behavior of technical efficiency, and also TFP growth and its components are investigated.

Keywords: D24; G21; Input distance function; Semiparametric smooth coefficient model; Stochastic frontier model; Decomposition (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:jproda:v:54:y:2020:i:2:d:10.1007_s11123-020-00589-3

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DOI: 10.1007/s11123-020-00589-3

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