Abstract
This paper proposes a semiparametric smooth-coefficient stochastic production frontier model where all the coefficients are expressed as some unknown functions of environmental factors. The inefficiency term is multiplicatively decomposed into a scaling function of the environmental factors and a standard truncated normal random variable. A testing procedure is suggested for the relevance of the environmental factors. Monte Carlo study shows plausible ¯nite sample behavior of our proposed estimation and inference procedure. An empirical example is given, where both the semiparametric and standard parametric models are estimated and results are compared.
Original language | English |
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Number of pages | 17 |
Publication status | Published - 2012 |
Event | Congrès AFSE 2012 - Paris, France Duration: 2 Jul 2012 → 4 Oct 2012 |
Conference
Conference | Congrès AFSE 2012 |
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Country/Territory | France |
City | Paris |
Period | 2/07/12 → 4/10/12 |
Keywords
- semiparametric smooth-coe±cient model
- stochastic frontier model
- environmental factors