Semiparametric smooth-coefficient stochastic frontier model

Sun, K; Kumbhakar, SC

Abstract

This paper proposes a semiparametric smooth-coefficient (SPSC) stochastic production frontier model where regression coefficients are unknown smooth functions of environmental factors (Z). Technical inefficiency is specified in the form of a parametric scaling function which also depends on the Z variables. Thus, in our SPSC model the Z variables affect productivity directly via the technology parameters as well as through inefficiency. A residual-based bootstrap test of the relevance of the environmental factors in the SPSC model is suggested. An empirical application is also used to illustrate the technique.

Citation

Sun, K., & Kumbhakar, S. (2013). Semiparametric smooth-coefficient stochastic frontier model. Economics Letters, 120(2), 305-309. https://doi.org/10.1016/j.econlet.2013.05.001

• Journal Article Type: Article
• Acceptance Date: May 3, 2013
• Publication Date: Aug 1, 2013
• Deposit Date: May 29, 2015
• Journal: Economics Letters
• Print ISSN: 0165-1765
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 120
• Issue: 2
• Pages: 305-309
• DOI: https://doi.org/10.1016/j.econlet.2013.05.001
• Publisher URL: http://dx.doi.org/10.1016/j.econlet.2013.05.001
• Related Public URLs: http://www.journals.elsevier.com/economics-letters/