Modeling the effect of competition using robust conditional nonparametric frontiers: Evidence from U.S. manufacturing sector
Michael Polemis (),
Thanasis Stengos () and
Nickolaos Tzeremes ()
MPRA Paper from University Library of Munich, Germany
The study applies the probabilistic framework of nonparametric frontier estimation in order to model the effect of competitive conditions on sectors’ production efficiency levels. We utilize conditional Order-m robust frontiers modeling the dynamic effects of competitive conditions on a sample of 462 U.S. 6-digit manufacturing sectors over the period 1958-2009. The results derived from the time-dependent robust conditional estimators unveil a non-linear relationship between market competition and productive efficiency. Our findings suggest that for higher competitive conditions the effect is positive up to a certain threshold point after which the effect becomes negative.
Keywords: Probabilistic frontier analysis; Conditional efficiency; Order-m estimators; U.S. manufacturing; Competition. (search for similar items in EconPapers)
JEL-codes: C14 L60 O14 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:89240
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