This paper offers a methodology to address the endogeneity of inputs in the directional technology distance function (DTDF) based formulation of banking technology which explicitly accommodates the presence of undesirable nonperforming loans -- an inherent characteristic of the bank's production...

In this paper, we propose simulation based Bayesian inference procedures in a cost system that includes the cost function and the cost share equations augmented to accommodate technical and allocative inefficiency. Markov Chain Monte Carlo techniques are proposed and implemented for Bayesian...