{"title":"Endogeneity-corrected stochastic frontier with market imperfections","authors":"","doi":"10.1007/s00181-024-02577-0","DOIUrl":null,"url":null,"abstract":"<h3>Abstract</h3> <p>While the product and labour market imperfections reveal efficiency losses, they may influence technology adoption and its change, raising the endogeneity issue of productivity and efficiency estimates. Using a two-step approach, this work offers the endogeneity-corrected stochastic frontier for such a contemporaneous relation and accounts for efficiency and productivity losses due to market imperfections. A modified frontier function, defined as the residue per capital unit, has been drawn from the Cobb–Douglas function to estimate the terms containing the product and labour market imperfections along with other factors capturing the levels of technology, scale and technical efficiency. First, a standard frontier panel model estimates technology and technical efficiency terms with a proxy function in polynomials of market imperfection terms used for the contemporaneous relation, and then a GMM approach applies to the residue to estimate the parameters containing market imperfections. The estimated results using the three-digit industries across 17 major Indian states for 2008–2016 reveal a strong presence of product and labour market imperfections and associated efficiency losses. The efficiency in the product market has been lower and has further deteriorated in most industries, but not in the labour market.</p>","PeriodicalId":11642,"journal":{"name":"Empirical Economics","volume":null,"pages":null},"PeriodicalIF":1.9000,"publicationDate":"2024-03-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Empirical Economics","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1007/s00181-024-02577-0","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
While the product and labour market imperfections reveal efficiency losses, they may influence technology adoption and its change, raising the endogeneity issue of productivity and efficiency estimates. Using a two-step approach, this work offers the endogeneity-corrected stochastic frontier for such a contemporaneous relation and accounts for efficiency and productivity losses due to market imperfections. A modified frontier function, defined as the residue per capital unit, has been drawn from the Cobb–Douglas function to estimate the terms containing the product and labour market imperfections along with other factors capturing the levels of technology, scale and technical efficiency. First, a standard frontier panel model estimates technology and technical efficiency terms with a proxy function in polynomials of market imperfection terms used for the contemporaneous relation, and then a GMM approach applies to the residue to estimate the parameters containing market imperfections. The estimated results using the three-digit industries across 17 major Indian states for 2008–2016 reveal a strong presence of product and labour market imperfections and associated efficiency losses. The efficiency in the product market has been lower and has further deteriorated in most industries, but not in the labour market.
期刊介绍：
Empirical Economics publishes high quality papers using econometric or statistical methods to fill the gap between economic theory and observed data. Papers explore such topics as estimation of established relationships between economic variables, testing of hypotheses derived from economic theory, treatment effect estimation, policy evaluation, simulation, forecasting, as well as econometric methods and measurement. Empirical Economics emphasizes the replicability of empirical results. Replication studies of important results in the literature - both positive and negative results - may be published as short papers in Empirical Economics. Authors of all accepted papers and replications are required to submit all data and codes prior to publication (for more details, see: Instructions for Authors).The journal follows a single blind review procedure. In order to ensure the high quality of the journal and an efficient editorial process, a substantial number of submissions that have very poor chances of receiving positive reviews are routinely rejected without sending the papers for review.Officially cited as: Empir Econ
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