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- Firm-Specific Temporal Variation In Technical Efficency Results Of: A Stochastic Output Distance Function

Author

Listed:
  • Luis Orea Sánchez

    () (Universidad de Oviedo)

  • Rafael Álvarez Cuesta

    () (Universidad de Oviedo)

Abstract

The aim of this paper is to test the temporal variation of technical efficiency of the Spanish Savings Banks during the period 1985-1994. Furthermore, a stochastic output distance function (Shephard, 1970) is employed to accommodate multiple output technology. The distance function provides the advantage that it does not need information about prices, so it can accommodate the multiproduct nature of the financial sector only using the quantitiesas data. The temporal variation of efficiency is modeled using an extension of Battese and Coelli (1992), allowing for firm-specific patterns of temporal change. El objetivo de este trabajo es contrastar la variación temporal de la eficiencia técnica de las Cajas de Ahorros españolas durante el periodo 1985-1994. Para ello la tecnología se modeliza a través de la función de distancia (Shephard, 1970) y el término de ineficiencia se especifica mediante una generalización del modelo propuesto por Battese y Coelli (1992). La función de distancia tiene la ventaja de que puede recoger tecnologías multiproducto sin precisar de información acerca de precios. Esta ventaja es mayor en un sector como el bancario en el que, generalmente, los precios se construyen a partir de gastos, lo cual podría suponer un problema. Por último, el modelo propuesto permite que el término de ineficiencia varíe con el tiempo de forma particular para cada empresa.

Suggested Citation

  • Luis Orea Sánchez & Rafael Álvarez Cuesta, 1998. "- Firm-Specific Temporal Variation In Technical Efficency Results Of: A Stochastic Output Distance Function," Working Papers. Serie EC 1998-27, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  • Handle: RePEc:ivi:wpasec:1998-27
    as

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    File URL: http://www.ivie.es/downloads/docs/wpasec/wpasec-1998-27.pdf
    File Function: Fisrt version / Primera version, 1998
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    References listed on IDEAS

    as
    1. Schmidt, Peter & Sickles, Robin C, 1984. "Production Frontiers and Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 367-374, October.
    2. Rolf Fare & Daniel Primont, 1995. "The Opportunity Cost of Duality," Microeconomics 9506001, EconWPA.
    3. Shawna Grosskopf & Kathy J. Hayes & Lori L. Taylor & William L. Weber, 1997. "Budget-Constrained Frontier Measures Of Fiscal Equality And Efficiency In Schooling," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 116-124, February.
    4. Kumbhakar, Subal C., 1990. "Production frontiers, panel data, and time-varying technical inefficiency," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 201-211.
    5. Cornwell, Christopher & Schmidt, Peter & Sickles, Robin C., 1990. "Production frontiers with cross-sectional and time-series variation in efficiency levels," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 185-200.
    6. Bauer, Paul W., 1990. "Recent developments in the econometric estimation of frontiers," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 39-56.
    7. Fare, Rolf, et al, 1993. "Derivation of Shadow Prices for Undesirable Outputs: A Distance Function Approach," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 374-380, May.
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    Cited by:

    1. Ignacio Fuentes & Teresa Sastre, 1999. "Mergers and Acquisitions in the Spanish Banking Industry: some Empirical Evidence," Working Papers 9924, Banco de España;Working Papers Homepage.

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