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Panel stochastic frontier models with endogeneity

Author

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  • Mustafa U. Karakaplan

    (University of South Carolina)

Abstract

In this article, I introduce xtsfkk as a new command for fitting panel stochastic frontier models with endogeneity. The advantage of xtsfkk is that it can control for the endogenous variables in the frontier and the inefficiency term in a longitudinal setting. Hence, xtsfkk performs better than standard panel frontier estimators such as xtfrontier that overlook endogeneity by design. Moreover, xtsfkk uses Mata’s moptimize() functions for substantially faster execution and completion speeds. I also present a set of Monte Carlo simulations and examples demonstrating the performance and usage of xtsfkk.

Suggested Citation

  • Mustafa U. Karakaplan, 2022. "Panel stochastic frontier models with endogeneity," Stata Journal, StataCorp LP, vol. 22(3), pages 643-663, September.
    • Handle: RePEc:tsj:stataj:y:22:y:2022:i:3:p:643-663
    DOI: 10.1177/1536867X221124539
    Note: to access software from within Stata, net describe http://www.stata-journal.com/software/sj22-3/st0652/
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    Cited by:

    1. Karakaya, Etem & Alataş, Sedat & Erkara, Elif & Mert, Betül & Akdoğan, Tuğba & Hiçyılmaz, Burcu, 2024. "The rebound effect of material and energy efficiency for the EU and its major trading partners," Energy Economics, Elsevier, vol. 134(C).
    2. Fungáčová, Zuzana & Kerola, Eeva & Weill, Laurent, 2023. "Does bank efficiency affect the bank lending channel in China?," Emerging Markets Review, Elsevier, vol. 55(C).
    3. Dibyendu Maiti & Chiranjib Neogi, 2024. "Endogeneity-corrected stochastic frontier with market imperfections," Empirical Economics, Springer, vol. 67(3), pages 1149-1183, September.
    4. Guccio, Calogero & Pignataro, Giacomo & Romeo, Domenica & Vidoli, Francesco, 2024. "Is austerity good for efficiency, at least? A counterfactual assessment for the Italian NHS," Socio-Economic Planning Sciences, Elsevier, vol. 92(C).
    5. Lori Taylor & Shawna Grosskopf & Kathy Hayes & Laura Razzolini, 2023. "The role of poverty measurements in achieving educational equity through school finance reform," Journal of Productivity Analysis, Springer, vol. 60(2), pages 109-127, October.
    6. David Boto‐García & Carlos Varela‐Quintana & Alvaro Muñiz, 2023. "Foreign players, team production, and technical efficiency: Evidence from European soccer," Bulletin of Economic Research, Wiley Blackwell, vol. 75(4), pages 1209-1241, October.

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