Flexible Panel Stochastic Frontier Model with Serially Correlated Errors
11 Pages Posted: 13 Dec 2017 Last revised: 15 Mar 2021
Date Written: December 10, 2017
We propose a flexible dynamic panel stochastic frontier model with a feasible estimation strategy. The model accommodates individual heterogeneity and allows for an ARMA (p, q) specification of the model’s serial correlations. Distribution assumptions are also flexible. The dynamics are specified through the composed error of the model, rather than through its individual components.
Keywords: stochastic frontier models; dynamic panels; individual heterogeneity
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