A new stochastic frontier model with cross-sectional effects in both noise and inefficiency terms
噪声与无效率项均含横截面效应的新随机前沿模型
This paper develops a new stochastic frontier model that allows for cross-sectional (spatial) correlation in both the noise and inefficiency terms, which are likely to be of a different nature. The main econometric novelty of the proposed model is that it can be estimated in a straightforward manner by maximum likelihood and non-linear least squares. The proposed model is useful when there are omitted but spatially correlated variables, the firms benefit from best practices…