Authors

Levent Kutlu

Document Type

Article

Publication Date

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.

Comments

© 2020 Elsevier B.V. Original published version available at 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

Included in

Economics Commons

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