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  • ZISF-Endog-Aug-2016-Final

    Rights statement: This is the author’s version of a work that was accepted for publication in Economics Letters. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Economics Letters, 147, 2016 DOI: 10.1016/j.econlet.2016.08.014

    Accepted author manuscript, 243 KB, PDF document

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On the estimation of zero-inefficiency stochastic frontier models with endogenous regressors

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Published
<mark>Journal publication date</mark>10/2016
<mark>Journal</mark>Economics Letters
Volume147
Number of pages4
Pages (from-to)19-22
Publication StatusPublished
Early online date17/08/16
<mark>Original language</mark>English

Abstract

In this paper, we investigate endogeneity issues in the zero-inefficiency stochastic frontier (ZISF) models by mean of simultaneous equation setting. Specifically, we allow for one or more regressors to be correlated with the statistical noise. A modified limited information maximum likelihood (LIML) approach is used to estimate the parameters of the model. Moreover, the firm specific inefficiency score is also provided. Limited Monte Carlo simulations show that the proposed estimators perform well in finite sample.

Bibliographic note

This is the author’s version of a work that was accepted for publication in Economics Letters. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Economics Letters, 147, 2016 DOI: 10.1016/j.econlet.2016.08.014