Document Type
Article
Publication Date
10-2020
Abstract
We propose a spatial autoregressive stochastic frontier model, which allows for the endogeneity in both the frontier and environmental variables (i.e., endogeneity due to correlation of inefficiency term and the two-sided error term). The model parameters are estimated using a single-stage control function approach. Monte Carlo simulations show that our proposed model and approach perform well in finite samples. We employed our methodology to the Chinese chemicals firm data and found evidence for both spatial effects and endogeneity.
Recommended Citation
Kutlu, Levent, Kien C. Tran, and Mike G. Tsionas. “A Spatial Stochastic Frontier Model with Endogenous Frontier and Environmental Variables.” European Journal of Operational Research 286, no. 1 (October 2020): 389–99. https://doi.org/10.1016/j.ejor.2020.03.020.
First Page
389
Last Page
399
Publication Title
European Journal of Operational Research
DOI
10.1016/j.ejor.2020.03.020
Comments
© 2020 Elsevier B.V. Original published version available at https://doi.org/10.1016/j.ejor.2020.03.020