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Estimation of technical change: Direct semi/nonparametric approaches

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  • Kumbhakar, Subal C.
  • Li, Mingyang
  • Zhao, Shunan

Abstract

This paper introduces some novel approaches to formulate and estimate technical change (TC) nonparametrically in a variety of cases without estimating the underlying production technology that is usually specified by a production, cost or transformation function. The binding theme in all our formulations of TC is the use of the first-order conditions of profit maximization or cost minimization. The new TC measures are observation-specific due to their nonparametric nature.

Suggested Citation

  • Kumbhakar, Subal C. & Li, Mingyang & Zhao, Shunan, 2021. "Estimation of technical change: Direct semi/nonparametric approaches," Economics Letters, Elsevier, vol. 199(C).
    • Handle: RePEc:eee:ecolet:v:199:y:2021:i:c:s0165176521000112
    DOI: 10.1016/j.econlet.2021.109734
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    References listed on IDEAS

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    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    2. Emir Malikov & Shunan Zhao & Subal C. Kumbhakar, 2020. "Estimation of firm‐level productivity in the presence of exports: Evidence from China's manufacturing," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 35(4), pages 457-480, June.
    3. Amit Gandhi & Salvador Navarro & David A. Rivers, 2020. "On the Identification of Gross Output Production Functions," Journal of Political Economy, University of Chicago Press, vol. 128(8), pages 2973-3016.
    4. Barbara Casu & Alessandra Ferrari & Tianshu Zhao, 2013. "Regulatory Reform and Productivity Change in Indian Banking," The Review of Economics and Statistics, MIT Press, vol. 95(3), pages 1066-1077, July.
    5. Kumbhakar, Subal C., 2013. "Specification and estimation of multiple output technologies: A primal approach," European Journal of Operational Research, Elsevier, vol. 231(2), pages 465-473.
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    More about this item

    Keywords

    Nonparametric; Semiparametric smooth coefficient; Technical change; Profit maximization; Cost minimization;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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