When analyzing productivity and efficiency of firms, stochastic frontier models are very attractive because they allow, as in typical regression models, to introduce some noise in the Data Generating Process. Most of the approaches so far have been using very restrictive fully parametric...

A primal index of productivity change is introduced which decomposes exactly in three components: technical change, technical efficiency change and average scale economies (radial scale change). The proposed index is invariant to movement along indifference surfaces and it collapses to the...

We contrast the theory underpinning state aid for failing banks with that for failing firms in the non-financial sector. We argue that there is little justification for measures to ‘compensate’ rivals when the bank has been saved for reasons of systemic stability. The Commission’s approach...

The recent nancial crisis highlighted how banks' funding and investment portfolios are associated with their risk taking. In a "normal" DEA banking efficiency model this risk element, embedded in banks' business models, is indicated by possibly inappropriate mixes of funding portfolio and/or...

The validity of many efficiency measurement methods rely upon the assumption that variables such as input quantities and output mixes are independent of (or uncorrelated with) technical efficiency, however few studies have attempted to test these assumptions. In a recent paper, Wilson (2003)...

In this paper it is shown that a well known procedure (GEKS) of transitivizing a bilateral system of productivity comparisons is implicitly a way of imposing a homothetic structure onto the data. The main implication of this result is that deviations between the bilateral and the multilateral...

A primal index of productivity change is introduced which decomposes exactly into three components: technical change, technical efficiency change and average scale economies (radial scale change). The productivity index is defined using variations of the distance function along pre-assigned...

One of the main characteristics of the technological capabilities of countries has always been their uneven distribution across the countries. This paper explores the dynamic of technological capabilities for a sample of 42 countries over the period 1995-2007 introducing some methodological...

Directional Distance Functions (DDFs) are becoming a popular way of measuring efficiency as they encompass the Shephard output and input distance functions as special cases. However, the most critical and still unsolved issue related to DDF remains the selection of the direction along which to...