Productivity and efficiency: Do we need a bridge?

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F60460709%3A41110%2F24%3A101341" target="_blank" >RIV/60460709:41110/24:101341 - isvavai.cz</a>

Result on the web

<a href="https://www.sciencedirect.com/science/article/abs/pii/S0925527324001440" target="_blank" >https://www.sciencedirect.com/science/article/abs/pii/S0925527324001440</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.1016/j.ijpe.2024.109287" target="_blank" >10.1016/j.ijpe.2024.109287</a>

Result language

angličtina

Original language name

Productivity and efficiency: Do we need a bridge?

Original language description

The paper focuses on comparing two popular approaches to estimating firm production technology: the proxyvariable method and the stochastic frontier (SF) analysis approach. We show that although the economic interpretations of productivity and efficiency are not the same, the difference between them is not fundamental and even trivial as far as the estimation techniques are concerned when the same structural framework is assumed. By showing the connection and comparing the difference between these two methods, this paper is aimed at building a bridge to connect these two strands of literature. In addition, we provide the SF audience with a new estimation method, i.e., the modified proxy -variable method, with its advantages in handling the endogeneity issue, along with a new way to estimate technical inefficiency. We examine their finite sample performance using Monte Carlo simulations. In the empirical section, we compare the proposed estimator with the conventional MLE SF estimator using Chinese manufacturing firms in the computer and peripheral sector over the period 1998 to 2007. We find that the estimates from our method are more reasonable in explaining the production behavior of these firms, and firms' technical inefficiency levels are highly persistent over time.

Czech name

—

Czech description

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Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

—

OECD FORD branch

50202 - Applied Economics, Econometrics

Project

—

Continuities

S - Specificky vyzkum na vysokych skolach

Publication year

2024

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

INTERNATIONAL JOURNAL OF PRODUCTION ECONOMICS

ISSN

0925-5273

e-ISSN

0925-5273

Volume of the periodical

274

Issue of the periodical within the volume

neuvedeno

Country of publishing house

CZ - CZECH REPUBLIC

Number of pages

13

Pages from-to

1-13

UT code for WoS article

001257558600001

EID of the result in the Scopus database

2-s2.0-85195187680