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Abstract
The returns to scale for nineteen South Asian countries are estimated
using window and cumulative rolling stochastic frontier regression analysis.
The stochastic frontier analysis accounts for technical inefficiency of Hicks
non-neutral technology production function in the estimation of the returns
to scale. The window rolling regression and cumulative rolling regression
allows the estimation of short and long run time-varying returns to scale,
respectively. Empirical application to Asian agriculture sector using Food
and Agricultural Organization data from 1961-2008 indicates returns to
scale are under (over) estimated by the traditional panel models in the
short (long) run time-varying estimation. The time-varying estimates of
returns to scale indicate decreasing trend in the short run compared to
long run analysis.
Keywords: Asian agriculture sector, stochastic frontier analysis, window
and cumulative time-varying input elasticities and returns to scale, one-way
fixed effect, 1961-2008.