Firm-heterogeneity, persistent and transient technical inefficiency:a generalized true random effects model

Tsionas, Michael and Kumbhakar, Subal C. (2014) Firm-heterogeneity, persistent and transient technical inefficiency:a generalized true random effects model. Journal of Applied Econometrics, 29 (1). pp. 110-132. ISSN 0883-7252

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Abstract

This paper considers a panel data stochastic frontier model that disentangles unobserved firm effects (firm heterogeneity) from persistent (time-invariant/long-term) and transient (time-varying/short-term) technical inefficiency. The model gives us a four-way error component model, viz., persistent and time-varying inefficiency, random firm effects and noise. We use Bayesian methods of inference to provide robust and efficient methods of estimating inefficiency components in this four-way error component model. Monte Carlo results are provided to validate its performance. We also present results from an empirical application that uses a large panel of US commercial banks

Item Type:
Journal Article
Journal or Publication Title:
Journal of Applied Econometrics
Uncontrolled Keywords:
/dk/atira/pure/subjectarea/asjc/3300/3301
Subjects:
ID Code:
65229
Deposited By:
Deposited On:
13 Jun 2013 10:53
Refereed?:
Yes
Published?:
Published
Last Modified:
21 Nov 2020 03:23