Methodological considerations upon Stochastic Frontier Analysis for panel data models: evidence from cost-efficiency ECF model in the Argentine Banking Sector.

Authors

  • Ignacio G. Girela Universidad Nacional del Córdoba, Facultad de Ciencias Económicas (Córdoba, Argentina)
  • José M. Vargas Universidad Nacional del Córdoba, Facultad de Ciencias Económicas (Córdoba, Argentina)

DOI:

https://doi.org/10.55444/2451.7321.2021.v59.n1.36335

Keywords:

panel data, SFA, banking entities, benchmarking, simulations

Abstract

In this paper we make a methodological analysis of the Error Components Frontier (ECF) panel data model performance based on Stochastic Frontier Analysis (SFA) method for cost efficiency benchmarking in the presence of small panels and outliers. By means of a set of simulations and a subsequent application to the Argentine banking sector during the period 2005-2014, we prove that under these conditions an SFA model may not be adequate for benchmarking. These results are relevant for the empirical literature since small panels with the presence of outliers represent classical scenarios in developing economies industries.

Reception date: December 3, 2019.
Acceptance date: June 28, 2021.

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Published

2021-12-01

How to Cite

Girela, I. G., & Vargas, J. M. (2021). Methodological considerations upon Stochastic Frontier Analysis for panel data models: evidence from cost-efficiency ECF model in the Argentine Banking Sector. Revista De Economía Y Estadística, 59(1), 37–60. https://doi.org/10.55444/2451.7321.2021.v59.n1.36335

Issue

Vol. 59 No. 1 (2021)

Section

ARTÍCULOS

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