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Separating Technical Change From Time-Varying Technical Inefficiency In The Absence Of Distributional Assumptions

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  • Karagiannis, Giannis
  • Midmore, Peter
  • Tzouvelekas, Vangelis

Abstract

This paper proposes an alternative approach for separating technical change from time-varying technical inefficiency. The approach uses the general index, developed by Baltagi and Griffin (1988), to model technical change along the production function, and a quadratic function of time trend, as in Cornwell, Schmidt and Sickles (1990), to capture the temporal pattern of technical inefficiency. In such a setting, all parameters associated with the rate of technical change and the temporal pattern of technical inefficiency are identified separately. Moreover, the proposed approach is independent of any distributional assumption concerning the one-sided error term associated with technical inefficiency, and can easily be estimated using FGLS. Comparative empirical results based on a translog production frontier function, and estimates of technical inefficiency and technical change are presented for the UK dairy sector over the period 1982-1992.

Suggested Citation

  • Karagiannis, Giannis & Midmore, Peter & Tzouvelekas, Vangelis, 1999. "Separating Technical Change From Time-Varying Technical Inefficiency In The Absence Of Distributional Assumptions," Miscellaneous Papers 11842, Agecon Search.
  • Handle: RePEc:ags:miscpa:11842
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    Cited by:

    1. Yan, Jia & Sun, Xinyu & Liu, John J., 2009. "Assessing container operator efficiency with heterogeneous and time-varying production frontiers," Transportation Research Part B: Methodological, Elsevier, vol. 43(1), pages 172-185, January.
    2. Heshmati, Almas & Kumbhakar, Subal C., 2010. "Technical Change and Total Factor Productivity Growth: The Case of Chinese Provinces," IZA Discussion Papers 4784, Institute for the Study of Labor (IZA).
    3. Vangelis Tzouvelekas & Dimitra Vouvaki & Anastasios Xepapadeas, 2006. "Total Factor Productivity Growth and the Environment: A Case for Green Growth Accounting," Working Papers 0617, University of Crete, Department of Economics.
    4. Giannis Karagiannis & Peter Midmore & Vangelis Tzouvelekas, 2002. "Parametric Decomposition of Output Growth," Working Papers 0204, University of Crete, Department of Economics.
    5. Boris Bravo-Ureta & Daniel Solís & Víctor Moreira López & José Maripani & Abdourahmane Thiam & Teodoro Rivas, 2007. "Technical efficiency in farming: a meta-regression analysis," Journal of Productivity Analysis, Springer, vol. 27(1), pages 57-72, February.
    6. Kristin Roll, 2013. "Measuring performance, development and growth when restricting flexibility," Journal of Productivity Analysis, Springer, vol. 39(1), pages 15-25, February.
    7. Suzanne O’Neill & Alan Matthews, 2001. "Technical Change and Efficiency in Irish Agriculture," The Economic and Social Review, Economic and Social Studies, vol. 32(3), pages 263-284.
    8. Frederic Ang & Pieter Jan Kerstens, 2016. "To Mix or Specialise? A Coordination Productivity Indicator for English and Welsh farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(3), pages 779-798, September.
    9. Rene Fahr & Uwe Sunde, 2006. "Regional dependencies in job creation: an efficiency analysis for Western Germany," Applied Economics, Taylor & Francis Journals, vol. 38(10), pages 1193-1206.
    10. David I. Stern, 2004. "Diffusion of Emissions Abating Technology," Rensselaer Working Papers in Economics 0420, Rensselaer Polytechnic Institute, Department of Economics.

    More about this item

    Keywords

    TIME-VARYING EFFICIENCY; PANEL DATA; DAIRY; Research and Development/Tech Change/Emerging Technologies; O0; Q1;

    JEL classification:

    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture

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