خلاصة:
This paper is concerned with the estimation of frontier production function to measure the technical efficiency for Iranian textile companies during 1995. The objective of this estimation is to investigate if there are any differences in the technical efficiency between the private and public firms as well as the relationship between technical efficiency and size of textile companies in Iran. A Translog stochastic production function is used for this purpose. Maximum Likelihood method is used to estimate parameters of the model and predict technical efficiency for each enterprise. Empirical results show that most of the enterprises are operating at high level of efficiencies. The overall mean efficiency is 84%, indicating that, on average, there exists potential for an increase in output of 16%. Public firms are found to operate more inefficiently than private ones. A negative relationship between number of labor and technical efficency is recognized.
ملخص الجهاز:
ABSTRACT This paper is concerned with the estimation of frontier production function to measure the technical efficiency for Iranian textile companies during 1995.
JEL Classification: C21, 021Keywords: Technical efficiency, Stochastic frontier production, Textile industries, Translog function .
The literature on the estimation of frontier functions to measure economic efficiency of firms has been developed in different directions.
g. , Kumbhakar, Ghosh, and McGuckin (1991) and Battese and Coelil (1995) firm characteristics are assumed to directly affect technical efficiency.
N (O,a2), truncated normal distibution, iii) Vi and u, independent and, iv) The explanatory variables (x,Z) are non-stochastic, independent of Vii and u, The technical efficiency of production for the i-th firm is defined as the radio of actual output to maximum possible output: 1'& = exp (-Ui) (4) 3.
4. Empirical results Both the Cobb-Douglas and the translog frontier production functions are estimated.
For a matter of comparison and the sensivity of the results the parameter estimates of both the Cobb-Douglas and the translog frontier production functions are reported in Table 1.
If the parameter, v, is zero, then the variance of the inefficiency effects is zero; thus the model reduces to a traditional mean response function in which characteristics variables; ownership, size (number of workers), and interaction of them are included in the production function.
A Stochastic Frontier Production Function Incorporating a Model for Technical Inefficiency Effects.
A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function.