Productivity and efficiency: Do we need a bridge?

Kód výsledku v 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>

Výsledek na webu

<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>

Jazyk výsledku

angličtina

Název v původním jazyce

Productivity and efficiency: Do we need a bridge?

Popis výsledku v původním jazyce

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.

Název v anglickém jazyce

Productivity and efficiency: Do we need a bridge?

Popis výsledku anglicky

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.

Druh

J_imp - Článek v periodiku v databázi Web of Science

CEP obor

—

OECD FORD obor

50202 - Applied Economics, Econometrics

Projekt

—

Návaznosti

S - Specificky vyzkum na vysokych skolach

Rok uplatnění

2024

Kód důvěrnosti údajů

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

Název periodika

INTERNATIONAL JOURNAL OF PRODUCTION ECONOMICS

ISSN

0925-5273

e-ISSN

0925-5273

Svazek periodika

274

Číslo periodika v rámci svazku

neuvedeno

Stát vydavatele periodika

CZ - Česká republika

Počet stran výsledku

13

Strana od-do

1-13

Kód UT WoS článku

001257558600001

EID výsledku v databázi Scopus

2-s2.0-85195187680