What question did this study set out to answer?

To develop a dynamic panel stochastic frontier model that captures firms' production adjustments over time.

Bayesian inference in dynamic panel stochastic frontier models

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Dynamic panel model analyzes firm performance, revealing insights on productivity in UK firms.

To develop a dynamic panel stochastic frontier model that captures firms' production adjustments over time.
Developed a dynamic panel stochastic frontier model
Used Bayesian inference with Markov Chain Monte Carlo (MCMC) techniques
Analyzed publicly listed UK companies in the manufacturing and construction sectors from 2004 to 2022
Simulated model robustness in small and moderate samples
Firms exhibited stagnant production processes, with a half-life of supply adjustment of 6 quarters
Average technical efficiency estimated at 89%
Findings emphasize dynamic frictions and heterogeneity in evaluating firm performance

Jonuzaj et al. (2026) studied this question.

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