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Benchmarking with data envelopment analysis: a return on asset perspective

Seong‐Jong Joo (Hasan School of Business, Colorado State University‐Pueblo, Pueblo, Colorado, USA)
Don Nixon (College of Business, Central Washington University‐Des Moines, Des Moines, Washington, USA)
Philipp A. Stoeberl (John Cook School of Business, Saint Louis University, St Louis, Missouri, USA)

Benchmarking: An International Journal

ISSN: 1463-5771

Article publication date: 12 July 2011




Selecting appropriate variables for analytical studies is critical for the validity of analysis. It is the same with data envelopment analysis (DEA) studies. In this study, for benchmarking using DEA, the paper seeks to suggest a novel framework based on return on assets (ROA), which is popular and user‐friendly to managers, and demonstrate it by use of an example.


The paper demonstrates the selection of variables using the elements of ROA and applies DEA for measuring and benchmarking the comparative efficiency of companies in the same industry.


It is frequently impossible to obtain internal data for benchmarking from competitors in the same industry. In this case, annual reports may be the only source of data for publicly traded companies. The framework demonstrated with an example is a practical approach for benchmarking with limited data.

Research limitations/implications

This study employs financial data and is subject to the limitations of accounting practices.


The approach is applicable to various studies for performance measurement and benchmarking with minor modifications. Contributions of the study are twofold: first, a framework for selecting variables for DEA studies is suggested; second, the applicability of the framework with a real‐world example is demonstrated.



Joo, S., Nixon, D. and Stoeberl, P.A. (2011), "Benchmarking with data envelopment analysis: a return on asset perspective", Benchmarking: An International Journal, Vol. 18 No. 4, pp. 529-542.



Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited

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