Estimation of a Doubly Heteroscedastic Stochastic Frontier Cost Function

Hadri, Kaddour

doi:10.1080/07350015.1999.10524824

Cited by 104 publications

(64 citation statements)

References 8 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Uncontrolled heteroscedasticity leads to biased inefficiency estimates (Belotti et al, 2012). Equation (5), the baseline equation (Aigner et al, 1977;Meeusen and van Den Broeck, 1977) has been extended such that the variance in the inefficiency term depends on the independent variables (z) and the noise term is allowed to be heteroscedastic due to variances arising from industry and country differences (Hadri, 1999). Table I provides descriptive statistics for the whole sample.…”

Section: Discussionmentioning

confidence: 99%

Innovation inputs and efficiency: manufacturing firms in Sub-Saharan Africa

Barasa

Vermeulen

Knoben

et al. 2019

EJIM

View full text Add to dashboard Cite

Purpose-Countries in Africa have a common goal policy of industrialisation that is expected to be driven by investing in innovation that yields efficiency. The purpose of this paper is to investigate the technical efficiency effects arising from innovation inputs including internal R&D, human capital development (HCD), and foreign technology adoption in manufacturing firms in Africa. Design/methodology/approach-This study uses cross-sectional firm-level survey data from the 2013 World Bank Enterprise Survey and the linked 2013 Innovation Follow-up Survey. A heteroscedastic half-normal stochastic frontier is used for analysing the technical efficiency effects of innovation inputs of 418 firms. Findings-This study reveals that internal R&D, and foreign technology have negative effects on technical efficiency. Notwithstanding, the combination of foreign technology and internal R&D, and foreign technology and HCD reinforce each other's effects on technical efficiency. Practical implications-This study provides evidence that whereas individual innovation inputs may not yield positive efficiency outcomes, the combination of absorptive capacity enhancing inputs comprising internal R&D and HCD with foreign technology is vital for enhancing technical efficiency in manufacturing firms in Africa. This study offers important lessons for managers in manufacturing firms in Africa. Originality/value-This study is virtually the first to investigate the relationship between innovation inputs and efficiency in Africa. This study demonstrates that investing in foreign technology in isolation from absorptive capacity enhancing innovation inputs diminishes efficiency. HCD and internal R&D are imperative for building absorptive capacity that enhances efficiency outcomes arising from foreign technology.

show abstract

Section: Discussionmentioning

confidence: 99%

Innovation inputs and efficiency: manufacturing firms in Sub-Saharan Africa

Barasa

Vermeulen

Knoben

et al. 2019

EJIM

View full text Add to dashboard Cite

show abstract

“…We consider the half‐normal assumption by Caudill and Ford (), Caudill et al. (), and Hadri (), which allows heteroskedasticity in the distribution of

u_{i}

to analyze the effects of exogenous factors on inefficiency

u_{i}

. Equations and specify the half‐normal inefficiency model.…”

Section: Methodsmentioning

confidence: 99%

Enhancing Supplier Development: An Efficiency Perspective

Chen

Kao

2018

J of Business Logistics

View full text Add to dashboard Cite

T his research identifies the factors that contribute to the buyer's efficiency in utilizing supplier development practices for their supplier's performance. Prior studies support the notion that supplier development practices improve supplier performance; however, very few studies focus on the factors that could improve a buyer's supplier development efficiency. Using a survey sample of 261 manufacturing plants from 11 countries, this study shows that relational norms and information sharing affect supplier development efficiency. Furthermore, information sharing by suppliers is more effective than information sharing by buyers in terms of efficiency enhancement.

show abstract

“…Heteroscedasticity is very likely to appear in both types of errors (

v_{i j}

and

u_{i j}

). Thus, to correct for this issue we use the doubly heteroscedastic SFA model by employing the specification designed by Hadri (1999) that assumes

u_{i j} \sim N^{+} (0, σ_{u_{i j}}^{2})

to define the variances of v and u as the following variance equations

σ_{v_{i j}}^{2} = σ_{v}^{2} e x p (δ_{i}^{'} W_{j})

and

σ_{u_{i j}}^{2} = σ_{u}^{2} e x p (γ_{i}^{'} P_{j})

, in which W and P are matrices that contain regressors that explain the variance behavior (i.e. variance regressors).…”

Section: Methodsmentioning

confidence: 99%

Disentangling the efficiency drivers in country‐level global health programs: An empirical study

Berenguer

Iyer

Yadav

2016

J of Ops Management

View full text Add to dashboard Cite

Motivated by the cost reductions and outcome improvements generated by benchmarking in many industries, we focus on in-country global health programs to identify and quantify opportunities for process improvement. We empirically study the major efficiency drivers of reproductive health (RH) country programs in Sub-Saharan Africa sponsored by international funding organizations. To ensure a level playing field for comparison across countries, we quantify the impact of cross-country heterogeneity and random shocks on the efficiency of RH programs. To analyze these relationships and isolate the effects attributable to managerial inefficiency, we use a three-stage Data Envelopment Analysis (DEA)/ Stochastic Frontier Analysis (SFA) model. We show the impact of environmental factors on program efficiency, linking policy making decisions with operational and health outcome performance. We also show that donor fragmentation negatively impacts managerial efficiency, and we suggest actions to mitigate this effect. We then provide a way to improve performance through benchmarking efforts within groups of countries and present an initial prototype of such efforts.

show abstract

Estimation of a Doubly Heteroscedastic Stochastic Frontier Cost Function

Cited by 104 publications

References 8 publications

Innovation inputs and efficiency: manufacturing firms in Sub-Saharan Africa

Innovation inputs and efficiency: manufacturing firms in Sub-Saharan Africa

Enhancing Supplier Development: An Efficiency Perspective

Disentangling the efficiency drivers in country‐level global health programs: An empirical study

Contact Info

Product

Resources

About