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st: xtfrontier


From   "ALICE DOBSON" <alice_dobson@hotmail.com>
To   statalist@hsphsun2.harvard.edu
Subject   st: xtfrontier
Date   Tue, 30 Aug 2005 08:23:06 -0400

Hi Statalisters,
I want to estimate the following (production function) model


Yit = b0 + b1 Ageit + b2 X1i + b3 X2it + b4 X3it + b5 X4 it + b5 X5it + &#936;it + &#950;it

where, &#936;it = {(X4/N) it (X4/N)it-1 }/ h ((X4/N)it-1)

where both X4 and N are firm-specific time varying variables
N is not in the main equation

X4 and N are highly correlated with Yit but their ratio is not

&#936;it is a dynamic efficiency term

Can I use xtfrontier to estimate this production function model?

The concept of the model is similar to that used to estimate a production function by Olley and Pakes (1996) "Olley, G.S., and Pakes, A. 1996. The Dynamics of Productivity in the Telecommunications Equipment Industry. Econometrica, 64 (6): 1263-1297.

Many researchers have used MATLAB to estimate such models.

Best,
Alice

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