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A command to fit spatial stochastic frontier models with inefficiency spillovers

Author

Listed:
  • Kerui Du

    (Xiamen University)

  • Federica Galli

    (University of Bologna)

  • Luojia Wang

    (Xiamen University)

Abstract

The interdependence among decision-making units challenges the as- sumption of cross-sectional independence in traditional stochastic frontier models. Based on the seminal spatial Durbin specification for the frontier function, Galli (2023, Journal of the Royal Statistical Society, C ser., 72: 346–367) introduced inefficiency spillovers to measure neighborhood effects related to the inefficiency determinants. This article presents a new command, sfsd, that fits the comprehen- sive spatial stochastic frontier model that Galli (2023) proposed, accommodating various spatial and nonspatial specifications in both the frontier and the ineffi- ciency equations. sfsd is the first command that includes different typologies of spatial spillovers in a stochastic frontier framework, facilitating the investigation of contemporary research topics such as agglomeration and technology diffusion at both the firm and the regional levels. The description, options, and illustrative examples for the command are outlined in this article.

Suggested Citation

  • Kerui Du & Federica Galli & Luojia Wang, 2025. "A command to fit spatial stochastic frontier models with inefficiency spillovers," Stata Journal, StataCorp LLC, vol. 25(1), pages 189-211, March.
    • Handle: RePEc:tsj:stataj:v:25:y:2025:i:1:p:189-211
    DOI: 10.1177/1536867X251322970
    Note: to access software from within Stata, net describe http://www.stata-journal.com/software/sj25-1/st0771/
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