Parametric stochastic frontier models yield firm-level conditional distributions of inefficiency that are truncated normal. Given these distributions, how should one assess and rank firm-level efficiency? This study compares the techniques of estimating a) the conditional mean of inefficiency...

This paper proposes an alternative specification for technical efficiency effects in a stochastic production frontier model. The proposed specification is distribution free and thus eschews one-sided error term present in almost all the existing inefficiency effects models. The efficiency...

This paper investigates the link between competition and efficiency for the Hungarian corporate sector during various phases of the transition process. We employ frontier production functions to explore differences among groups of firms, and to identify the typical adjustment process of each...

In this study, we combine the latent class stochastic frontier model with the complex time decay model to form a single-stage approach that accounts for unobserved technological differences to estimate efficiency and the determinants of efficiency. In this way, we contribute to the literature by...

In this paper we consider a novel stochastic frontier model with multi-output multi-input production technology that accommodates non-radial inefficiency in both inputs and outputs. These measures are also observation-specific. To identify them, we use (i) a system model consisting of the...

The main goal of a scientific journal is to diffuse new knowledge. The number of citations received by a journal can be considered as a measure of this objective and, in turn, as a measure of productivity in relation to the production process in which the journals are involved. In order to...

This paper critically analyses, in the context of classical and neoclassical perspectives, the concepts of ‘returns to scale’ and ‘economies of scale’ by relating the former to the concept of ‘production unit’ and the latter to the concept of ‘firm’, and concludes that returns to...

This paper is concerned with significance testing of the effects of exogenous determinants upon the one-sided deviation term of a semiparametric stochastic frontier model. Two nonparametric significance tests for all or a subset of the determinants of inefficiency are proposed. The proposed...

Technical, allocative and economic efficiency measures are derived for a sample of swine producers in Hawaii using the parametric stochastic efficiency decomposition technique and nonparametric data envelopment analysis (DEA). Efficiency measures obtained from the two frontier approaches are...

Estimation of the one sided error component in stochastic frontier models may erroneously attribute firm characteristics to inefficiency if heterogeneity is unaccounted for. However, it is not clear in general in which component of the error distribution the covariates should be included. In the...