{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,8,17]],"date-time":"2026-08-17T14:47:34Z","timestamp":1786978054005,"version":"build-2736575974"},"reference-count":38,"publisher":"Wiley","issue":"7","license":[{"start":{"date-parts":[[2015,11,26]],"date-time":"2015-11-26T00:00:00Z","timestamp":1448496000000},"content-version":"vor","delay-in-days":0,"URL":"http:\/\/onlinelibrary.wiley.com\/termsAndConditions#vor"}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":["J of Applied Econometrics"],"published-print":{"date-parts":[[2016,11]]},"abstract":"<jats:title>Summary<\/jats:title>\n                  <jats:p>\n                    This paper offers a methodology to address the endogeneity of inputs in the directional technology distance function (DTDF)\u2010based formulation of banking technology which explicitly accommodates the presence of\n                    <jats:italic>undesirable<\/jats:italic>\n                    nonperforming loans\u2014an inherent characteristic of the bank's production due to its exposure to credit risk. Specifically, we model nonperforming loans as an undesirable output in the bank's production process. Since the stochastic DTDF describing banking technology is likely to suffer from the endogeneity of inputs, we propose addressing this problem by considering a system consisting of the DTDF and the first\u2010order conditions from the bank's cost minimization problem. The first\u2010order conditions also allow us to identify the \u2018cost\u2010optimal\u2019 directional vector for the banking DTDF, thus eliminating the uncertainty associated with an ad hoc choice of the direction. We apply our cost system approach to the data on large US commercial banks for the 2001\u20132010 period, which we estimate via Bayesian Markov chain Monte Carlo methods subject to theoretical regularity conditions. We document dramatic distortions in banks' efficiency, productivity growth and scale elasticity estimates when the endogeneity of inputs is assumed away and\/or the DTDF is fitted in an arbitrary direction. Copyright \u00a9 2015 John Wiley &amp; Sons, Ltd.\n                  <\/jats:p>","DOI":"10.1002\/jae.2491","type":"journal-article","created":{"date-parts":[[2015,11,26]],"date-time":"2015-11-26T06:54:55Z","timestamp":1448520895000},"page":"1407-1429","source":"Crossref","is-referenced-by-count":55,"title":["A Cost System Approach to the Stochastic Directional Technology Distance Function with Undesirable Outputs: The Case of us Banks in 2001\u20132010"],"prefix":"10.1002","volume":"31","author":[{"given":"Emir","family":"Malikov","sequence":"first","affiliation":[{"name":"Department of Economics St Lawrence University  Canton NY USA"}],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Subal C.","family":"Kumbhakar","sequence":"additional","affiliation":[{"name":"Department of Economics State University of New York at Binghamton  NY USA"}],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Mike G.","family":"Tsionas","sequence":"additional","affiliation":[{"name":"Department of Economics Lancaster University Management School  UK"}],"role":[{"vocabulary":"crossref","role":"author"}]}],"member":"311","published-online":{"date-parts":[[2015,11,26]]},"reference":[{"key":"e_1_2_9_2_1","doi-asserted-by":"publisher","DOI":"10.1016\/S0378-4266(99)00095-3"},{"key":"e_1_2_9_3_1","doi-asserted-by":"publisher","DOI":"10.1016\/j.jbankfin.2012.09.009"},{"key":"e_1_2_9_4_1","doi-asserted-by":"publisher","DOI":"10.1016\/j.jeconom.2015.06.006"},{"key":"e_1_2_9_5_1","unstructured":"AtkinsonSE PrimontD TsionasEG.2014.Estimation of efficient production using optimal directions with multiple inputs and outputs. 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