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Some specification aspects for three-factor models of a company's production potential taking into account intellectual capital

Author

Listed:
  • Aivazian, Sergei

    (CEMI RAS, Moscow, Russia)

  • Afanasiev, Mikhail

    (CEMI RAS, Moscow, Russia)

  • Rudenko, Victoria

    (Moscow Engineering Physics Institute (National Research Nuclear University), Russia)

Abstract

As a contribution to further development of the stochastic frontier methodology the specification method for a 3-factor stochastic model of the production potential of a company is given. Along with labor input and physical capital input we consider intellectual capital as a basic production factor. For the description of a random variable that defines production efficiency the truncated at zero normal distribution is used. The presented formalized scheme that is based on hypothesis testing criteria and information about adequate efficiency factors allows one to choose a model reasonably. Practical approval of the given method is provided on the statistical data for the American companies operating in «Biotechnology and Drugs» sector and for the Russian companies operating in «Pharmaceutical production» and «Software development» areas. It is shown that unreasonable model specification may lead to significant distortions in the production efficiency estimates. For different estimations of intellectual capital hypothesis testing procedure regarding adequacy of the estimations is provided.

Suggested Citation

  • Aivazian, Sergei & Afanasiev, Mikhail & Rudenko, Victoria, 2012. "Some specification aspects for three-factor models of a company's production potential taking into account intellectual capital," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 27(3), pages 36-69.
    • Handle: RePEc:ris:apltrx:0177
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    References listed on IDEAS

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    1. Valeriy Makarov & Albert Bakhtizin, 2014. "The Estimation Of The Regions’ Efficiency Of The Russian Federation Including The Intellectual Capital, The Characteristics Of Readiness For Innovation, Level Of Well-Being, And Quality Of Life," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(4), pages 9-30.
    2. Ayvazyan Sergey Arutyunovich & Afanasyev Mikhail Yuryevich, 2015. "Assessment of innovative activity of regions in the Russian federation," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 11(1), pages 7-21.
    3. Макаров Валерий Леонидович & Айвазян Сергей Арутюнович & Афанасьев Михаил Юрьевич & Бахтизин Альберт Рауфович & Нанавян Ашхен Мардиросовна, 2014. "Оценка Эффективности Регионов Рф С Учетом Интеллектуального Капитала, Характеристик Готовности К Инновациям, Уровня Благосостояния И Качества Жизни Населения," Экономика региона, CyberLeninka;Федеральное государственное бюджетное учреждение науки «Институт экономики Уральского отделения Российской академии наук», issue 4, pages 9-30.
    4. Айвазян С.А. & Афанасьев М.Ю. & Кудров А.В., 2016. "Модели Производственного Потенциала И Оценки Технологической Эффективности Регионов Рф С Учетом Структуры Производства," Журнал Экономика и математические методы (ЭММ), Центральный Экономико-Математический Институт (ЦЭМИ), vol. 52(1), pages 28-44, январь.
    5. Tsvetkova, Anna, 2021. "Technical efficiency trends of Russian firms in 2013–2018," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 63, pages 91-116.
    6. Aivazian, Sergei & Afanasiev, Mikhail & Rudenko, Victoria, 2014. "Analysis of dependence between the random components of a stochastic production function for the purpose of technical efficiency estimation," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 34(2), pages 3-18.
    7. Айвазян С.А. & Афанасьев М.Ю. & Руденко В.А., 2014. "Оценка Эффективности Регионов Рф На Основе Модели Производственного Потенциала С Характеристиками Готовности К Инновациям," Журнал Экономика и математические методы (ЭММ), Центральный Экономико-Математический Институт (ЦЭМИ), vol. 50(4), pages 34-70, октябрь.
    8. Valery Makarov & Sergey Ayvazyan & Mikhail Afanasyev & Albert Bakhtizin & Ashkhen Nanavyan, 2016. "Modeling the Development of Regional Economy and an Innovation Space Efficiency," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 10(3), pages 76-91.

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    More about this item

    Keywords

    econometric model; production potential; model specification; production factors; efficiency factors; intellectual capital; production efficiency.;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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