المجلة الجزائرية للتنمية الإقتصادية
Volume 7, Numéro 2, Pages 321-330
2020-12-29
Estimating A Mixture Of Stochastic Production Frontier: Technology Gap And Technical Efficiency Measures
Authors : Hajji Dhahri Sawssen .
Abstract
In this paper, we extend the switching model developed by Caudill (2003) for the panel case in two ways. First, we incorporate technical inefficiency in the model. Secondly, we consider that each firm has a specific probability to use one of the two technologies, in the industry. Then, we construct two groups with homogeneous technology (this firm classification is based on the estimated probabilities obtained in the previous step). Finally, we estimate two production frontiers for each firms group in order to estimate what we call technical inefficiency net levels. This methodology is applied to a French panel of the textile industry (1993-1997). The preliminary results show that the technical efficiency is very low (nearly 45% on average) under the homogeneous technology assumption. However, the average technical efficiency is about 80% with the extended switching regression model. Thus, if we ignore the technology heterogeneity, we underestimate the technical efficiency of approximately 30% on average.
Keywords
Technology, technical efficiency, switching regression.
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