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The productivity of a firm is analyzed in terms of the maximal level of output that can be achieved for a given combination of inputs. This is made possible by estimating the monotone and concave frontier functions using an improved bias-corrected estimator. The bias-corrected estimator is derived by obtaining the asymptotic distribution of the data envelopment analysis estimator and its finite-sample performance is assessed in a simulation study. The proposed estimator is based on consistent estimation of the density function and the second derivative of the production frontier to define the economic efficiency of a firm., 1. INTRODUCTION Suppose that ([X.sub.1], [Y.sub.1]), ..., ([X.sub.n], [Y.sub.n]) are iid with a density f in [R.sup.2]. The support of f is assumed to be of the form [Psi] = [...]

Single time trend (STT) and multiple time trend (MTT) models has been used to measure the technical change in Iranian manufacturing industries during 1971-1993. Results show that STT and MTT trend models spawn different time behavior of technical change. The MTT model shown a substantial decline in the pattern of technical change during 1978 in comparison to rapid political changes. The STT model, on the other hand, did not yield a sharp decline in the pattern of technical change due to the even pattern of technical progress.

In current debates about micro-credit, joint-liability schemes are often viewed as the only viable way to non-collateralised lending, and are thus seen as almost synonymous with micro-credit. This article reports about an alternative, non-participatory approach to micro-credit. Prompted by the apparent inability of group credit schemes to reign in lending costs, the article sets out the institutional requirements for cheap, 'mass-produced' credit. It argues that such credit can be viable if mechanisms are in place enforcing the self-selection of potential borrowers and self-motivation of existing borrowers. The analysis of a 'mass-minimalist' micro-credit institution from South Africa supports the argument., I. INTRODUCTION Micro-credit is now an accepted development policy tool and attracts attention and funding at record levels. Donors, development officials and researchers discuss the problems of uncollateralised lending - [...]

Whether child labour displaces adult labour, giving rise to unemployment, is a matter of their substitutability in production. Using a flexible form production function fitted to data on Egypt's economy, we generate Hicks elasticities of complementarity, own and cross-price elasticities, as well as simulate employment effects on adult labour as a result of changing the fixed quantity of labour in compliance with the international call to end child labour. Adult males appear to be complementary with, and adult females substitutes for child labour, although the employment effects of banning child labour are inconclusive., INTRODUCTION Child labour faces much international opposition. Substantial market activity by children has been perceived for most of this century as destructive to an individual's intellectual and physical development and [...]

A supply-and-demand-based analysis was conducted to derive an equilibrium model of team performance for the English Football league industry. Results showed a coordination failure within the industry that causes club owners to concentrate on short-term playing performance while neglecting industry infrastructure. The declining demand for football, increasing competition from more technologically advanced recreational products and antiquated equipment were highlighted. The new model can be used to analyze the impact of proposed reforms on the distribution of profits within the industry., 1. Introduction The idea of an industry, a set of competing specialist firms within a well-defined market, is little more than a metaphor in most of the economy, but in [...]

Equilibrium in incomplete markets is affected by externalities which affects the unanimity of shareholders and the general objectives of the firm. These externalities includes individual shareholder's interests, concern for external implications of the firm's objectives and benefits derived from control. Equilibrium exists in complete markets without similar externalities because of unanimous shareholders decisions.

A new method formulated by Charnes, Semple, Song and Thomas for uncertainty situations to model efficient production functions in the context of the airline industry in Latin America is presented. A 'Robustly Efficient Parametric Frontier' in a two-stage approach is used to develop an empirical efficient production function. A key feature of the method is the immediate availability of the marginal tradeoffs of the efficient production function, without the discontinuities of derivatives and numerical instabilities.

The paper addresses functional form issues that arise when testing for the existence of homogeneously weakly separable aggregates in producer or consumer theory. Blackorby, Primont and Russell showed that the commonly used flexible functional forms became inflexible when separability restrictions were imposed. The paper proposes functional forms that are: (i) flexible, (ii) parsimonious, and (iii) have the correct curvature, both before and after separability restrictions are imposed. Two functional forms are proposed that are based on the normalized quadratic functional form, and the appropriate tests for the existence of separable aggregates are derived. The second test is a modification of Woodland's separability test. Key words: Commodity aggregation; Tests of separability; Flexible functional forms

The implications for growth in a simple one-sector capital accumulation model where public investments in infrastructure are endogenous are examined. In the model, infrastructure is nonexclusive but may exhibit varying degrees of nonrivalry. Capital and labor income are taxed at a uniform rate to finance investments in infrastructure. The optimal share of output allocated to investments in infrastructure is independent of the degree of congestion. When production exhibits constant returns to augmentable factors, the equilibrium displays constant growth.

A nonparametric based-procedure to calculate ratings for gauging the relative operational competitiveness of a set of production units (PU) was developed using a multi-activity view of the concept of operational competitiveness. A PU transforms resources into outputs of services and goods. Operational competitiveness is a key component of the overall competitiveness of a PU. The procedure was used to gauge the relative operational competitiveness of the personnel in a major chartered bank.

A Bayesian approach to estimation, prediction, and model comparison in composed error production models is presented. A broad range of distributions on the inefficiency term define the contending models, which can either be treated separately or pooled. Posterior results are derived for the individual efficiencies as well as for the parameters, and the differences with the usual sampling-theory approach are highlighted. The required numerical integrations are handled by Monte Carlo methods with Importance Sampling, and an empirical example illustrates the procedures.

A neoclassical stochastic growth model of the Canadian economy using the maximum likehood methodology was presented. The model considers an economy which produces a final good resulting from a Cobb-Douglas production function. The economic data analyzed were Canada's gross national product, consumer expenditure on goods and services and investment expenditure from 1870 to 1983. It was concluded that there was no evidence that log ratios of consumption to output and investment to output were fixed.

The effects of inflation on the private sector was studied through a production function model incorporating economic data from US private firms from 1951 to 1992. Among the variables in the model were the logarithms of the constant-dollar output, business sector hours and ratio of employment in the services and goods producing industries. It was concluded that inflation does have a negative effect on industrial output because it induces uncertainty in the market. Government policymakers should therefore implement an economic policy that maintains a low and steady inflation rate.

The productivity of government capital was examined by analyzing a Cobb-Douglas production function incorporating economic data from the US, the UK, Belgium, Canada, Finland, Germany and Greece from 1963 to 1988. Governments have justified increases in infrastructure spending due to the alleged productivity of government capital. It was discovered that government capital may result in substantial productivity only if the time factors in productivity growth are generalized, implying that government capital is unproductive.

The stochastic coefficients modelling approach allows the estimation of the frontier production function by measuring technical efficiency for individual observations using cross-sectional data in cases where the frontier exhibits a non-neutral shift from the observed production function. With this approach, input-specific technical efficiency measures are computed as ratios of actual response coefficients to the frontier response coefficients. It allows observations to be evaluated in terms of efficiency, with respect to inputs.

A homothetic production function consists of a linear expansion path matched with a cost function which is characterized by an output variable distinct from the input price vector. However, in a production function with multiple outputs, the equivalence relationship between linear expansion paths and cost function separability is not valid. An input-homothetic model of input correspondences is analyzed to show that it is also ray-homothetic, and hence, will have linear expansion paths. Further analysis prove that homogenous and input-homothetic input correspondences are not linked.

Using a production function model, this paper examines Olson's thesis that political organization contributes to economic decline. The findings confirm that political organizations have a slight negative influence on state income growth rates. However, other variables account for almost 80 percent of the variation across states. This analysis points to the importance of capital markets and business and occupational interests and the utility of the production function approach for explaining growth.

The problem of manufacturing and shipping a product from an origin to a destination facing stochastic demands with a known probability distribution is considered. The production rate and shipment size are treated as decision variables. Profit per unit produced is derived as a function of the production rate and shipment size. An iterative methodology is developed based on the concavity of the profit function on the production rate for the uniform demand distribution case to generate the optimum production/shipping policy. These assumptions are tested via Monte Carlo experiments.

A production model which treats price and production as ex-ante variables as proposed by Karlin and Carr is analyzed to derive a determinate output volume effect given conditions of constant price elasticity of certainty demand and a uniform probability distribution. Simulation techniques are used to extend the impact of demand uncertainty on ouptut and price. The study supports Karlin and Carr's proposal that optimal price is higher than certainty price when demand is not price-elastic.

The von Liebig hypothesis or the law of the minimum for describing crop response to various inputs is validated using nonnested hypothesis tests. Among five alternatives, the von Liebig model with Mitscherlich regimes is shown to be the best interpretation of a sample of experimental data involving corn response to nitrogen and phosphorus. The test results thus widen the scope of application of the von Liebig hypothesis.

A mean variance model is developed to characterize the price efficiency at the firm level in Farrell's model that defines the production frontier. Problems of estimating structural efficiency at the industry level are also discussed. It is shown that the theory of stochastic dominance can be used to compare the efficiency distribution of two or more industries. The model is also proposed for combining the two measures of production and cost.

In this paper we estimate a multiple-output generalization of Berndt and Khaled's Box-Cox cost model to study the cost structure and growth in productivity in Belgian railroad operations. The estimated model includes several commonly used flexible functional forms as special or limiting cases. Empirical results indicate approximately constant returns to scale and an average rate of productivity growth of slightly less than 2% over the sample period. These findings were robust across cost function specifications, casting some doubt on the importance of choosing among flexible functional forms.

This study explores the impact of defence industrial production on the productivity of four Canadian three-digit sic industries. A Tornqvist index of the annual change of total factor productivity is calculated. A defence production innovation stock' is constructed from new data on defence industrial production in Canada between 1961 and 1985. SURE multiple regression analysis shows that military production has a negative impact on total factor productivity for the four industries.

First, this paper presents three different points of view on the long-run impact of technical and organizational progress on the time structure of production and circulation and thereby on the rate of capital turnover. Two of these approaches are Marxian (Hilferding and Andreff), one is Neo-Austrian (v. Weizsacker) but can easily be translated into a Marxian framework. Moreover, these expectations are confronted with empirical evidence on the rate of capital turnover in the U.S. manufacturing sector. Taking account of inflation and the effect of the business cycle, the results of the empirical analysis are not straightforward but suggest diverging development paths for the 21 industries under study. Still, during the '70s U.S. manufacturing companies seem to have in general succeeded in accelerating capital turnover by improving the time structure of production and circulation.

The paper analyzes a model in which the firm's output is stochastic and in which the manager receives subsidies if his operating profit is negative and is taxed in the converse case. The amount of the subsidy may depend on the amount of managerial labor expended on securing favorable treatment by the Center. Expected-profit maximization yields the result that input use is at least as great as that in the standard competitive case if the subsidy rate exceeds the tax rate. In various special cases, however, the solution under bailouts may coincide with the standard competitive case. The comparative statics of the model are analyzed and the results are extended to (1) the balanced budget case, in which the Center's expected tax receipts are equal to the expected subsidies it disburses and (2) the case in which the manager is risk-averse. J. Comp. Econom., march 1992, 16(1), pp. 150-167. Princeton University, Princeton, New Jersey 08544-1021.

Hiebert, L. Dean - The Labor-Managed Firm under Production Uncertainty This paper analyzes the input choices of the labor-managed firm facing production uncertainty. We provide conditions sufficient to determine the comparative static effects of increases in risk aversion and increases in the riskiness of production. The results depend critically on the stochastic specification of the firm's production function. In particular, we show that a risk-averse producer may employ more labor than a risk-neutral producer, contrary to the result obtained in the previous literature. J. Comp. Econom., March 1992, 16(1), pp. 94-104. Illinois State University, Normal, Illinois 61761.

The aggregate production structure of the Greek economy, like that of other semi- and less-developed economies, has not been seriously investigated, despite the fact that such structure is essential in properly explaining stagflation, productivity growth and factor substitution. In this paper a long-run production function that holds on average is estimated; actual output is connected to it through an estimated behavioural utilization equation depending on unexpected demand, cost and inventory changes. Factor productivity growth is also examined, and no conclusive evidence of a secular drop emerges.

In this paper we discover the necessary and sufficient condition for the existence of the technical efficiency criterion of inputs usage in production, which ought to satisfy the requirements of homogeneity, strict monotonicity, and at all efficient points be equal to one. We propose, in addition, some new class of quasi-homogeneous criteria of Russell-Fare-Lovell type. Journal of Economic Literature Classification Numbers: 022, 213.

In this paper, we offer a review of McClelland's methodology in the definitive test of his original hypothesis regarding the effect of n-ach on modern economic growth. We find that though many of his methodological decisions seem to have been made post hoc, his findings for the period 1929-50 are largely substantiated. We then replicate the study for the period 1950-77, making improvements in variable proxies as suggested by McClelland in his original study. There is no support for McClelland's hypothesis in the 1950-77 period. In light of this finding and the absence of a close correlation between electricity production and purchasing power adjusted measures of GNP, we conclude that McClelland's original finding was the chance result of data mining.

The main purpose of this study is to characterize and analyze high technology industrial firms. A technology index is constructed and used to classify firms. The largest concentration of high-tech firms is Israel is found in electronics and transport equipment industries, and the lowest in textiles and clothing. High-tech firms appear to be more productive, more export-oriented, pay higher wages, and earn higher rates of return than low-tech firms. The fact that high-tech firms in Israel are export-oriented is shown to be consistent with the international trade theories of comparative advantage and strategic rent-seeking.

The structural properties of steady states are well understood for multi-sector models, but the comparative dynamics of long-run growth are much less developed. By exploiting duality theory, this paper obtains conclusions about these effects for a small, internationally-trading, economy. Arbitrary numbers of consumption and capital goods, and a very general technology, are admitted. Definite conclusions about the short-run and long-run impact on outputs and factor prices are not always available but often correlations can be established between vectors of parameter changes and endogenous variable changes.

Multi-factor productivity measurement requires information on returns to scale and internal valuations of such quasi-fixed factors as resource inputs. We estimate a translog cost function for the asbestos industry in Canada, and find significant induced technological change and returns to scale. The shadow rental price of reserves is significant and drops sharply after 1975. The productivity index based on the estimated model sharply differs from the Divisia index, as computed from direct measurements under the assumption of constant returns to scale and ignoring the role of the resource as an input.