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Volume
1, No. 2,
August 2002
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Technology Gap,
Efficiency, and a Stochastic Metafrontier Function
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George E. Battese
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University
of New England, Australia
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D. S. Prasada Rao*
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University of New England,
Australia
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Abstract
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This
paper considers a stochastic metafrontier function
to investigate the technical efficiencies of firms
in different groups that may not have the same
technology. A decomposition of output is presented
involving the technology gap and technical
efficiency ratios for firms in a group relative to
the best practice in the industry.
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Key words
: efficiencies; stochastic metafrontier;
technology gap
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JEL classification
: C5; D24
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