NDLI: Conditional nonparametric frontier models for convex and nonconvex technologies: a unifying approach

Content Provider	Springer Nature Link
Author	Daraio, Cinzia Simar, Léopold
Copyright Year	2007
Abstract	The explanation of productivity differentials is very important to identify the economic conditions that create inefficiency and to improve managerial performance. In the literature two main approaches have been developed: one-stage approaches and two-stage approaches. Daraio and Simar (2005, J Prod Anal 24(1):93–121) propose a fully nonparametric methodology based on conditional FDH and conditional order-m frontiers without any convexity assumption on the technology. However, convexity has always been assumed in mainstream production theory and general equilibrium. In addition, in many empirical applications, the convexity assumption can be reasonable and sometimes natural. Lead by these considerations, in this paper we propose a unifying approach to introduce external-environmental variables in nonparametric frontier models for convex and nonconvex technologies. Extending earlier contributions by Daraio and Simar (2005, J Prod Anal 24(1):93–121) as well as Cazals et al. (2002, J Econometrics 106:1–25), we introduce a conditional DEA estimator, i.e., an estimator of production frontier of DEA type conditioned to some external-environmental variables which are neither inputs nor outputs under the control of the producer. A robust version of this conditional estimator is proposed too. These various measures of efficiency provide also indicators of convexity which we illustrate using simulated and real data.
Starting Page	13
Ending Page	32
Page Count	20
File Format	PDF
ISSN	0895562X
Journal	Journal of Productivity Analysis
Volume Number	28
Issue Number	1-2
e-ISSN	15730441
Language	English
Publisher	Springer US
Publisher Date	2007-06-13
Publisher Place	Boston
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	Convexity External-environmental factors Production frontier Nonparametric estimation Robust estimation Accounting/Auditing Operations Research/Decision Theory Econometrics Microeconomics
Content Type	Text
Resource Type	Article
Subject	Business and International Management Social Sciences Economics and Econometrics

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