This study proposes a model that measures firm dynamic inefficiency whilst accounting for technology heterogeneity by combining the typical structural dynamic stochastic frontier model and the random coefficients model. For comparison purposes, the structural dynamic stochastic frontier model with technological homogeneity is also estimated. The proposed models are applied to a panel dataset of Dutch dairy farms observed over the 2009-2016 period. The empirical findings suggest that inefficiency is inflated when technology heterogeneity is ignored.
Zoom link: https://zoom.us/j/97374751400?pwd=UjZ4cUVaSXZ2bnZUT1BNSVhySFlDQT09
