Transport infrastructure and technical efficiency in a panel of countries: Accounting for endogeneity in a stochastic frontier model

In this paper, a global production frontier is estimated using stochastic frontier models to assess the contribution of transport infrastructure to countries’ performance. We find that the role of infrastructure is underestimated under the exogeneity assumption indicating that handling endogeneity is crucial in the estimation. Results suggest that a better endowment of infrastructure contributes to economic growth, highlighting its importance in explaining differences in the economic performance of countries. Efficiency measures indicate that high-income countries are more efficient than low- and middle-income countries, suggesting that there is room for improving economic performance in countries with a lower income level. Better institutions also are essential to foster countries’ economic output.

Measuring Technical Efficiency of the Smallholder Crop Farms Using Stochastic Production Frontier Approach

Agricultural productivity in Africa is the lowest in the world with many households not being able to feed themselves. In Africa, women play a major role in agriculture sector constituting about 70–80 per cent of the labour force there. Regrettably, their farm productivity is relatively low mainly due to their inefficient use of farm inputs, which has a serious implication for their socio-economic condition as well as health and nutrition status. With this backdrop in mind, the study investigated the technical efficiency (TE) of the female crop farmers in Niger Delta, Nigeria. Stochastic production frontier approach and ANOVA models were applied to analyse the primary data collected on the 216 female farmers randomly selected from 18 communities of the 3 states in the Delta. It has been found that the farm size and the quantity of labour positively influence TE of these farmers. However, farmer’s age shows a negative sign implying a decrease in technical inefficiency in age whereas the years of schooling shows a positive sign implying an increase in inefficiency with schooling thereby a resulting decrease in TE with schooling. Farm efficiency level in Delta and Akwa Ibom States was not significantly different. However, TE level in both Delta and Akwa Ibom States was significantly different from Rivers State. Since, the age of farmers showed positive influence on TE, farmers should form group and organise regular meetings to enable share knowledge and experiences on the efficient use of farm resources in the Niger Delta Region, Nigeria.

Interpreting Stochastic Frontier Model as Random Coefficient Model and Vice Versa

This note explores the relationship between the stochastic frontier model and the random coefficient regression model. It shows how to interpret the former as a special case of the latter and vice versa. JEL classification numbers: C13, C51, D24. Keywords: Stochastic production frontier, Random coefficient regression, Composite error, Technical inefficiency.

Land Tenure Systems and Agricultural Productivity in Nigeria: a Case of Rice Production

This study examined land tenure systems and rice productivity in Nigeria. Primary data were used for the study. Data were collected with the aid of a well-structured questionnaire. A four-stage sampling technique was used to select a total sample size of three hundred and forty-nine (349) rice farmers based on the number of questionnaires correctly filled and returned from the selected sampled size. Data were analyzed using descriptive statistics, total factor productivity, and Stochastic production frontier model. The study revealed that large portion of the land (over 94%) used for rice production were acquired through inheritance mode of land acquisition and communal type of land tenure system widely practiced. The result of total factor productivity indicated that 62.18% of the rice farmers were at sub-optimal productivity level. The results of the stochastic production frontier function revealed that seed (P< 0.10), and fertilizer application (P<0.01) were the significant factors influencing technical efficiency of rice production in the study area. Based on the findings, the study recommend that current land use act and policy should be amended to prevent concurrent grabbing of agricultural land for non-agricultural purposes in order to enhance availability and accessibility of land for agriculture.

Measuring Efficiency in the Summer Olympic Games Disciplines: The Case of the Spanish Athletes

This paper estimates the technical efficiency of Olympic disciplines in which Spanish athletes participate, taking into account the results obtained in the last three Olympic Games. A stochastic production frontier model (normal-exponential), using two control variables linked to economic factors such as budget and sports scholarships, is estimated in order to obtain different Olympic sports’ efficiencies distinguished by gender, using data from 2005 to 2016. The results detect some differences among the considered disciplines. In all the cases, athletics, canoeing, cycling, swimming, and tennis, depending on the gender, reach better values. This paper’s novelty lies in the efficiency analysis carried out on the Olympic disciplines and athletes of a country and not on the country’s efficiency, which allows managers and stakeholders to decide about investments concerning disciplines and athletes.

Capital Expenditure and Operating Efficiency from Vertical Integration in the Global Semiconductor Industry

This paper uses a nonparametric production frontier approach to investigate the operating efficiency differences by the impacts of business model and capital expenditure in the global semiconductor industry. Handling the impact of capital expenditure as fixed input by the directional distance estimator, this study compares the operating efficiencies between the integrated device manufacturers and the fabless and foundry firms in the global semiconductor industry over 1999–2018. The estimation results indicate that vertically integrated manufacturers dominate the semiconductor industry, and the capital-intensive companies operate more efficiently than the asset-light fabless firms on average.