Non-Parametric Analysis of Efficiency: An Application to the Pharmaceutical Industry

Increases in the cost of research, specialization and reductions in public expenditure in health are changing the economic environment for the pharmaceutical industry. Gains in productivity and efficiency are increasingly important in order for firms to succeed in this environment. We analyze empirically the performance of efficiency in the pharmaceutical industry over the period 2010–2018. We work with microdata from a large sample of European firms of different characteristics regarding size, main activity, country of origin and other idiosyncratic features. We compute efficiency scores for the firms in the sample on a yearly basis by means of non-parametric data envelopment analysis (DEA) techniques. Basic results show a moderate average level of efficiency for the firms which encompass the sample. Efficiency is higher for companies which engage in manufacturing and distribution than for firms focusing on research and development (R&D) activities. Large firms display higher levels of efficiency than medium-size and small firms. Our estimates point to a decreasing pattern of average efficiency over the years 2010–2018. Furthermore, we explore the potential correlation of efficiency with particular aspects of the firms’ performance. Profit margins and financial solvency are positively correlated with efficiency, whereas employee costs display a negative correlation. Institutional aspects of the countries of origin also influence efficiency levels.

Download Full-text

Returns to Growth in Indian Automobile Industry: A Non-Parametric Data Envelopment Analysis (DEA) Approach

Journal of Quantitative Economics ◽

10.1007/s40953-021-00246-y ◽

2021 ◽

Author(s):

Ramakrushna Panigrahi

Keyword(s):

Data Envelopment Analysis ◽

Automobile Industry ◽

Data Envelopment ◽

Parametric Data ◽

Dea Approach ◽

Non Parametric

Download Full-text

An assessment of relative efficiency of banks in Sri Lanka

Corporate Ownership and Control ◽

10.22495/cocv9i3c3art3 ◽

2012 ◽

Vol 9 (3) ◽

pp. 357-372

Author(s):

Lalith Seelanatha ◽

Weerasinghe Hilary Elmo Silva

Keyword(s):

Sri Lanka ◽

Relative Efficiency ◽

Banking Industry ◽

Medium Size ◽

Data Envelopment ◽

Financial Reforms ◽

Managerial Efficiency ◽

Managerial Decisions ◽

Parametric Data ◽

Scale Of Operation

This paper examines how the financial reforms introduced throughout last 30 year period have improved the managerial efficiency of firms in the banking industry in Sri Lanka. Using non-parametric data envelopment analysis (DEA), this study estimated relative efficiency of banking firms in Sri Lanka using a sample of data collected from 20 year cross section (1989-2008). The study found that the banks in Sri Lanka have recorded relatively higher level of efficiency. Both managerial decisions and scale of operation have been equally contributed to the recorded inefficiency. We found that large banks were relatively more efficient than small banks. However, medium size banks were recorded relatively lower levels of efficiency which were mainly contributed by the managerial factor.

Download Full-text

A Non-Parametric Data Envelopment Analysis Approach for Cloud Services Evaluation

Service-Oriented Computing - ICSOC 2014 Workshops - Lecture Notes in Computer Science ◽

10.1007/978-3-319-22885-3_22 ◽

2015 ◽

pp. 250-255 ◽

Cited By ~ 2

Author(s):

Chunxiang Xu ◽

Yupeng Ma ◽

Xiaobo Wang

Keyword(s):

Data Envelopment Analysis ◽

Cloud Services ◽

Analysis Approach ◽

Data Envelopment ◽

Parametric Data ◽

Services Evaluation ◽

Non Parametric

Download Full-text

Technical Efficiency Through Innovative Methods and Estimations in Financial Markets

Encyclopedia of Organizational Knowledge, Administration, and Technology - Advances in Logistics, Operations, and Management Science ◽

10.4018/978-1-7998-3473-1.ch006 ◽

2021 ◽

pp. 55-70

Author(s):

Aikaterini Kokkinou

Keyword(s):

Financial Markets ◽

Technical Efficiency ◽

Stochastic Frontier Analysis ◽

Stochastic Frontier ◽

Productive Efficiency ◽

Data Envelopment ◽

Frontier Analysis ◽

Parametric Data ◽

Efficiency Estimation ◽

Non Parametric

This paper investigates technical efficiency estimation in financial markets, using both parametric and non-parametric techniques: parametric Stochastic Frontier Analysis (SFA) approach or non-parametric Data Envelopment Analysis (DEA). This chapter focuses on reviewing the stochastic frontier analysis literature regarding estimating inefficiency in financial markets level, as well as explaining producer heterogeneity along with the relationships with productive efficiency level. This chapter investigates technical efficiency estimation in financial markets, using both parametric and non-parametric techniques: parametric Stochastic Frontier Analysis (SFA) approach or non-parametric Data Envelopment Analysis (DEA). More specifically, this chapter focuses on reviewing the stochastic frontier analysis literature regarding estimating inefficiency, its industrial level, as well as explaining producer heterogeneity along with the relationships with productive efficiency level.

Download Full-text