Typically, the inefficiency term in stochastic frontier models is assumed to be positively skewed; however, efficiency scores are biased if this assumption is violated. This paper considers the case in which negative skewness is also allowed in the model. The paper discusses estimation of a...

Stochastic frontier models commonly assume positive skewness for the inefficiency term. However, when this assumption is violated, efficiency scores converge to unity. The potential endogeneity of model regressors introduces another empirical challenge, impeding the identification of causal...

Stochastic frontier models commonly assume positive skewness for the inefficiency term. However, when this assumption is violated, efficiency scores converge to unity. The potential endogeneity of model regressors introduces another empirical challenge, impeding the identification of causal...

Stochastic frontier models commonly assume positively skewed inefficiency. However, if the data speak against this assumption, sample-failure problems are often cited, but less attention is paid to economic reasons. We consider this phenomenon as a signal of distinctive population...

In this paper, we use a geoadditve Bayesian stochastic frontier analysis to empirically assess the impact of provincial-level financial development, corruption control, and their interaction on firm efficiency in Vietnam. Using panel data from more than 40,000 Vietnamese firms during 2006-2013,...

Providing insight into both consumer behaviour and market dynamics, information about the price elasticity of demand enables companies to optimise pricing strategies and improve their overall competitiveness. As prices and quantities are determined jointly, the empirical evaluation of price...

The inefficiency term in stochastic frontier models is usually assumed to have positive skewness; but when this assumption is not met, efficiency scores are overestimated. Potential endogeneity of model regressors poses an additional empirical challenge and greatly hinders identification of...

While demand models require a sound understanding of economic processes and should be flexible enough to capture nonlinearities, endogeneity can greatly hinder the identification of (nonlinear) causal relationships. To tackle these issues, we extend the instrument-free Gaussian copula approach...