Productivity and Performance:A GMM approach

Tsionas, Mike G. and Kumbhakar, Subal C. (2022) Productivity and Performance:A GMM approach. Oxford Bulletin of Economics and Statistics. ISSN 0305-9049

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In this paper we propose a single-step generalized method of moments (GMM) approach to estimate a production function with multiple quasi-fixed and variable inputs as well as productivity and inefficiency. Our approach relies on the system consisting of the production function, the first-order conditions of expected profit maximization with respect to the variable inputs, as well as general formulations for dynamic productivity and inefficiency. The estimation procedure takes care of correlations of both productivity and inefficiency with the variable inputs without using any distributional assumptions on the error terms (including inefficiency) in the system. We use Indonesian manufacturing census data to illustrate workings of our procedure.

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Journal Article
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Oxford Bulletin of Economics and Statistics
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This is the peer reviewed version of the following article:Tsionas, M.G. and Kumbhakar, S.C. (2023), Productivity and Performance: A GMM approach. Oxf Bull Econ Stat. which has been published in final form at This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.
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10 Jan 2023 14:05
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10 Jan 2023 14:05