This paper deals with estimation of a production technology where endogeneous choice of input and output variables is explicitly recognized. In particular, we assume that producers maximize return to the outlay (RO). For simplicity and tractability we start with a Cobb–Douglas transformation...

This study deals with modeling of production risk by means of a two-step procedure. In contrast to earlier studies of production risk, we do not immediately adopt restrictive functional forms for the risky production technology. We first test for the presence of production risk. If production...

In industries characterized by frequent innovation and high productivity growth, substantial variation in produced quantity and input use may occur, leading to increased costs. An effect that has received little attention is that inefficiency can exacerbate environmental impacts. This effect is...

The empirical literature on estimation of production technology mostly focuses on estimation of dual cost functions. Estimation of a profit function is not that common. Here, we formally test whether the production technology should be represented by a cost or profit function. We also derive...

An econometric analysis of productivity convergence in Norwegian salmon aquaculture is undertaken. We also test for the effects of learning and external industry infrastructure capital. Empirical evidence for reduction in productivity differentials is found, but the estimated models also provide...

Drilling expenses have increased sharply in recent years. The productivity of drilling operations – in terms of meters drilled per day – significantly influences exploration costs. Hence it is important to understand the factors that determine drilling productivity. In this study we analyze...

Agriculture and aquaculture have common features associated with their biological nature affecting risk exposure of the businesses. The aim of this paper is to compare risk exposure in salmon farming and agricultural enterprises in Norway by using an implicit error component model to examine the...