zbMATH — the first resource for mathematics

From efficiency measurement to efficiency improvement: The choice of a relevant benchmark. (English) Zbl 1002.90530
Summary: This article deals with efficiency improvement and how to identify appropriate benchmarks for inefficient firms to imitate. We argue that the most relevant benchmark is the most similar efficient firm. Having interpreted similarity in terms of input endowments, the problem reduces to find the closest reference firm on the efficient subset of the isoquant. To such an end, we introduce the concept of input-specific contractions. This concept allows to find the shortest path to the efficient subset. This information can be used to advise inefficient firms about which efficient firm to visit in order to detect its mistakes and to learn better managerial practices.

90B50 Management decision making, including multiple objectives
Full Text: DOI
[1] Banker, R.D.; Charnes, A.; Cooper, W.W., Some models for estimating technical and scale inefficiencies in data envelopment analysis, Management science, 30, 9, 1078-1092, (1984) · Zbl 0552.90055
[2] Bogetoft, P., Incentive efficient production frontiers: an agency perspective on DEA, Management science, 40, 8, 959-968, (1994) · Zbl 0816.90017
[3] Bogetoft, P.; Hougaard, J.L., Efficiency evaluations based on potential non-proportional improvements, Journal of productivity analysis, 12, 233-247, (1999)
[4] Charnes, A.; Cooper, W.W.; Rhodes, E., Measuring the efficiency of decision making units, European journal of operational research, 2, 429-444, (1978) · Zbl 0416.90080
[5] Coelli, T.J., A multi-stage methodology for the solution of orientated DEA models, Operations research letters, 23, 3-5, 143-149, (1998) · Zbl 0963.91032
[6] Day, D.L.; Lewin, A.Y.; Li, H., Strategic leaders or strategic groups: A longitudinal data envelopment analysis of the US brewing industry, European journal of operational research, 80, 619-638, (1995) · Zbl 0928.90056
[7] Dervaux, B.; Kerstens, K.; Vanden Eeckaut, P., Radial and nonradial static efficiency decompositions: A focus on congestion measurement, Transportation research B, 32, 5, 299-312, (1998)
[8] Färe, R., Efficiency and the production function, Zeitschrift für nationalökonomie, 35, 317-324, (1975) · Zbl 0321.90023
[9] Färe, R.; Grosskopf, S.; Lovell, C.A.K., Production frontiers, (1994), Cambridge University Press London
[10] Färe, F.X.; Lovell, C.A.K., Measuring the technical efficiency of production, Journal of economic theory, 19, 150-162, (1978) · Zbl 0398.90012
[11] Farrell, M.J., 1957. The measurement of production efficiency. Journal of the Royal Statistics Society A 120, 253-281
[12] Frei, F.X.; Harker, P.T., Projections onto efficient frontiers: theoretical and computational extensions to DEA, Journal of productivity analysis, 11, 275-300, (1999)
[13] Koopmans, T.C., Analysis of production as an efficient combination of activities, () · Zbl 0045.09506
[14] Kopp, R.J., 1981. The measurement of productive efficiency. A reconsideration. The Quarterly Journal of Economics 96, 477-503
[15] Lane, P.J.; Lubatkin, M., Relative absorptive capacity and interorganizational learning, Strategic management journal, 19, 461-477, (1998)
[16] Leibenstein, H., Allocative efficiency versus X-efficiency, American economic review, 56, 392-415, (1966)
[17] Lund, M.; Ørum, J.E., Computerised efficiency analysis in farm business advice, Farm management, 9, 10, 506-514, (1997)
[18] Russell, R.R., Measures of technical efficiency, Journal of economic theory, 35, 109-126, (1985) · Zbl 0555.90014
[19] Zieschang, K.D., An extended farrell technical efficiency measure, Journal of economic theory, 33, 387-396, (1984) · Zbl 0538.90008
This reference list is based on information provided by the publisher or from digital mathematics libraries. Its items are heuristically matched to zbMATH identifiers and may contain data conversion errors. It attempts to reflect the references listed in the original paper as accurately as possible without claiming the completeness or perfect precision of the matching.