scholarly journals Consistent inference in fixed-effects stochastic frontier models

2018 ◽  
Vol 202 (2) ◽  
pp. 161-177 ◽  
Author(s):  
Federico Belotti ◽  
Giuseppe Ilardi
Keyword(s):  
Fixed Effects ◽  
Stochastic Frontier ◽  
Stochastic Frontier Models

scholarly journals Entrepreneurial capability (EC) environment in ASEAN-05 emerging economies

2018 ◽  
Vol 12 (2) ◽  
pp. 206-221 ◽  
Author(s):  
Munshi Naser Ibne Afzal ◽  
Kasim Mansur ◽  
Umme Humayara Manni
Keyword(s):  
Fixed Effects ◽  
Negative Impact ◽  
Positive Impact ◽  
Stochastic Frontier ◽  
The Philippines ◽  
University Education ◽  
Positive Role ◽  
Content Type ◽  
Stochastic Frontier Models ◽  
Key Indicators

Purpose The entrepreneurial capability (EC) environment refers to the general social and economic settings of a given local/regional entrepreneurship environment. The primary purpose of this study is to uncover key indicators of the EC milieu and test these components empirically within the context of the Association of South East Asian Nations (ASEAN)-5 economies to elucidate the current state of their EC environments, at the regional and national levels. To this end, the aim of this study is twofold. First, this work endeavors to explicate the determinants of EC, with aims of elucidating its association to commercial opportunities in (ASEAN)-5 economies, namely, Indonesia, Malaysia, the Philippines, Singapore and Thailand. Next, this study applies the developed theory, including the identified determinants of EC to empirically test the efficiency and imperative coefficients of variables that have an impact on perceived entrepreneurial capabilities within a given environment. Design/methodology/approach This research applies two frontier models, namely, the consistent estimation of fixed-effects and linear transformation stochastic frontier models, to assess the coefficients of significant EC variables for the panel sample. Data corresponding to the assessed variables were retrieved from the databases of the Global Entrepreneurship Monitor (GEM) – 2016 and the World Competitiveness Yearbook (WCY) – 2016, for the period, 2010-2016. Findings The attained results suggest that factors corresponding to the variables “Entrepreneurship as a good career choice” and “perceived opportunities” have played a significantly positive role on the EC environment of ASEAN 05, although findings suggest both factors may still be improved upon. Conversely, the “fear of failure rate” factor was shown to have exerted a negative impact on the efficiency of the EC environment of ASEAN 05. Other important variables – such as intellectual property rights, university education and knowledge transfer rate – were shown to generate a positive impact on the EC environment of these economies. Originality/value This study makes an important contribution to the entrepreneurship literature and can stimulate policymakers to rethink the EC settings of ASEAN-05 in their pursuit of an innovation-driven region.

scholarly journals Do subsidies drive technical efficiency? The case of portuguese firms in the agribusiness sector

2020 ◽  
Vol 58 (3) ◽  
Author(s):  
Silvia Ferreira Marques Salustiano ◽  
Natália Barbosa ◽  
Tito Belchior Silva Moreira
Keyword(s):  
Technical Efficiency ◽  
Fixed Effects ◽  
Empirical Studies ◽  
Stochastic Frontier ◽  
The European Union ◽  
Policy Makers ◽  
Average Efficiency ◽  
The Public ◽  
Stochastic Frontier Models

Abstract: Successive reforms in the Common Agricultural Policy (CAP), enlargements of the European Union (EU) and pressures in the public budget increase the need for empirical studies to assess the role of subsidies in shaping firms’ performance and, hence, to support policy-makers decisions and decision-making in the productive sector. This paper assesses whether subsidies affect the technical efficiency of 1,943 Portuguese agribusiness firms over 2007-2015. By applying stochastic frontier models and fixed-effects models, to calculate the average efficiency of these firms, the results show different effects of subsidies among agribusiness sectors. The stochastic frontier model revealed that the subsidies have a positive and significant impact on the technical efficiency of three sectors, animal production, manufacture of food, and manufacture of paper. Further, except for firms in the forestry and logging sector, Portuguese agribusiness firms had higher average efficiency levels when subsidised, which provides evidence that subsidies could be important and contribute positively to the technical efficiency of Portuguese firms.

scholarly journals Estimation of Stochastic Frontier Models with Fixed Effects through Monte Carlo Maximum Likelihood

2011 ◽  
Vol 2011 ◽  
pp. 1-13 ◽  
Author(s):  
Grigorios Emvalomatis ◽  
Spiro E. Stefanou ◽  
Alfons Oude Lansink
Keyword(s):  
Monte Carlo ◽  
Random Effects ◽  
Fixed Effects ◽  
Likelihood Function ◽  
Stochastic Frontier ◽  
General Context ◽  
Explanatory Variables ◽  
Monte Carlo Experiments ◽  
Incidental Parameters ◽  
Stochastic Frontier Models

Estimation of nonlinear fixed-effects models is plagued by the incidental parameters problem. This paper proposes a procedure for choosing appropriate densities for integrating the incidental parameters from the likelihood function in a general context. The densities are based on priors that are updated using information from the data and are robust to possible correlation of the group-specific constant terms with the explanatory variables. Monte Carlo experiments are performed in the specific context of stochastic frontier models to examine and compare the sampling properties of the proposed estimator with those of the random-effects and correlated random-effects estimators. The results suggest that the estimator is unbiased even in short panels. An application to a cross-country panel of EU manufacturing industries is presented as well. The proposed estimator produces a distribution of efficiency scores suggesting that these industries are highly efficient, while the other estimators suggest much poorer performance.

scholarly journals Constraints in models of production and cost via slack-based measures

2021 ◽  
Author(s):  
Caroline Khan ◽  
Mike G. Tsionas
Keyword(s):  
Power Generation ◽  
Stochastic Frontier ◽  
Inequality Constraints ◽  
Order Conditions ◽  
Flexible Functional Forms ◽  
Cost Share ◽  
First Order ◽  
Stochastic Frontier Models ◽  
Endogenous Variables ◽  
Functional Forms

AbstractIn this paper, we propose the use of stochastic frontier models to impose theoretical regularity constraints (like monotonicity and concavity) on flexible functional forms. These constraints take the form of inequalities involving the data and the parameters of the model. We address a major concern when statistically endogenous variables are present in these inequalities. We present results with and without endogeneity in the inequality constraints. In the system case (e.g., cost-share equations) or more generally, in production function-first-order conditions case, we detect an econometric problem which we solve successfully. We provide an empirical application to US electric power generation plants during 1986–1997, previously used by several authors.

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