Accounting for unobservables in production models:management and inefficiency
AbstractThis paper explores the role of unobserved managerial ability in production and its relationship with technical efficiency. Previous analyses of managerial ability have been based on strong assumptions about its role in production or on the use of proxies. We avoid these limitations by introducing managerial ability as an unobserved random variable in a translog production function. The resulting empirical model can be estimated as a stochastic production frontier with random coefficients.
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Bibliographic InfoPaper provided by Centro de Estudios Andaluces in its series Economic Working Papers at Centro de Estudios Andaluces with number E2004/72.
Length: 27 pages
Date of creation: 2004
Date of revision:
Managerial ability; technical efficiency; production frontier; random coefficients model; maximum simulated likelihood.;
Other versions of this item:
- Bill Greene with Antonio Alvarez (Univ. of Oviedo) & Carlos Arias (Univ. of Leon), 2004. "Accounting For Unobservables In Production Models: Management And Inefficiency," Econometric Society 2004 Australasian Meetings 341, Econometric Society.
- C5 - Mathematical and Quantitative Methods - - Econometric Modeling
- D2 - Microeconomics - - Production and Organizations
This paper has been announced in the following NEP Reports:
- NEP-ACC-2004-10-18 (Accounting & Auditing)
- NEP-ALL-2004-10-18 (All new papers)
- NEP-BEC-2004-10-18 (Business Economics)
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