This article suggests that the global inefficiency which generally affects a production process is endogenous and depends on the incentives generated by the process environment. We propose to treat the usual correlation between the inefficiency and the regressors of the production frontier through the economic constraints that interfere on the activity of the producer.
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Paper provided by Toulouse - GREMAQ in its series Papers with number
98.503.
Find related papers by JEL classification: C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
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