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Technology Gap, Efficiency, and a Stochastic Metafrontier Function

Author

Listed:
  • George E. Battese

    (University of New England, Australia)

  • D. S. Prasada Rao

    (University of New England, Australia)

Abstract

This paper considers a stochastic metafrontier function to investigate the technical efficiencies of firms in different groups that may not have the same technology. A decomposition of output is presented involving the technology gap and technical efficiency ratios for firms in a group relative to the best practice in the industry.

Suggested Citation

  • George E. Battese & D. S. Prasada Rao, 2002. "Technology Gap, Efficiency, and a Stochastic Metafrontier Function," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 1(2), pages 87-93, August.
  • Handle: RePEc:ijb:journl:v:1:y:2002:i:2:p:87-93
    as

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    References listed on IDEAS

    as
    1. Yujiro Hayami, 1969. "Sources of Agricultural Productivity Gap Among Selected Countries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 51(3), pages 564-575.
    2. Yair Mundlak & René Hellinghausen, 1982. "The Intercountry Agricultural Production Function: Another View," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(4), pages 664-672.
    3. Battese, George & Rao, D.S. Prasada & Walujadi, Dedi, 2001. "Technical Efficiency and Productivity Potential of Firms Using a Stochastic Metaproduction Frontier," Efficiency Series Papers 2001/08, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    4. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    5. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
    6. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    7. Lau, Lawrence J. & Yotopoulos, Pan A., 1989. "The meta-production function approach to technological change in world agriculture," Journal of Development Economics, Elsevier, vol. 31(2), pages 241-269, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    efficiencies; stochastic metafrontier; technology gap;
    All these keywords.

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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