Regional technical efficiency: a stochastic frontier approach

Abstract

The aim of this paper is to analyse the (in)efficiency of the Spanish regions over the period 1986–91, using a stochastic frontier approach. Different distributional assumptions are used to estimate each region's (in)efficiency as well as the influence of the inputs on the productivity gains: half-normal, truncated-normal and exponential models. The results show that, on average, the inefficiency varies between the 15% and 19%.