Production Efficiency with the Stochastic Management Model
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Beschreibung
This monograph presents a method for resolving the issue of which distribution to assume when estimating the technical efficiency of industries using the stochastic production frontier model. Other studies use methods that rely on specific industry data, but this method identifies and resolves the distribution type by comparing data across many industries. A unique aspect highlighted here is the notion that by considering the distribution of inefficiency as a result of the asymptotic distribution derived from a specific stochastic process of firm productivity, it is possible to discern whether the technical inefficiency arises from some irrational decision making within the firms, indicated by the information on the inefficiency generating mechanism provided by the distribution parameters. This research clearly demonstrates the relationship between the econometric method of the stochastic production frontier model and Leibenstein's theory of X-inefficiency. The method proposed in this book is applied to data from Japanese firms, confirming that the observed variance in productivity within Japanese industries cannot be denied as the result of irrational decision making by firms.
This monograph presents a method for resolving the issue of which distribution to assume when estimating the technical efficiency of industries using the stochastic production frontier model. Other studies use methods that rely on specific industry data, but this method identifies and resolves the distribution type by comparing data across many industries. A unique aspect highlighted here is the notion that by considering the distribution of inefficiency as a result of the asymptotic distribution derived from a specific stochastic process of firm productivity, it is possible to discern whether the technical inefficiency arises from some irrational decision making within the firms, indicated by the information on the inefficiency generating mechanism provided by the distribution parameters. This research clearly demonstrates the relationship between the econometric method of the stochastic production frontier model and Leibenstein's theory of X-inefficiency. The method proposed in this book is applied to data from Japanese firms, confirming that the observed variance in productivity within Japanese industries cannot be denied as the result of irrational decision making by firms.
Is a novel method that identifies efficiency distributions using cross-industry comparison Links irrational choices to skewed productivity distribution Demonstrates that stochastic processes explain productivity variance as asymptotic distribution
Autor*in
Akio Torii
Themen in »Production Efficiency with the Stochastic Management Model«
Technical Efficiency Stochastic Production Frontier X-inefficiency Productivity Cross-industry Analysis Corrected OLS