DEA performance assessment of Greek listed metallurgical firms

Abstract

Purpose

This paper aims to assess two distinct aspects of performance in terms of technical (sales) efficiency and efficiency in market value generation of a sample of Greek metallurgical firms listed on the Athens Exchange by using data envelopment analysis (DEA).

Design/methodology/approach

Both aspects of performance are measured by employing the DEA BCC model, combined with bootstrap and generalized proportional distance function (GPDF). Statistical analysis is performed to investigate whether there is a positive link between the two examined performance dimensions.

Findings

Inefficiency is uncovered in both performance dimensions, but there is a lower level of performance in market value generation than in technical efficiency. Correlation analysis results do not point out positive links between performance measures for the sample firms.

Research limitations/implications

The derived performance measures allow firm managers to set their own priorities and to seek out improvements along the two dimensions of performance; moreover, they may contribute to the reduction of information asymmetry among investors.

Originality/value

This paper is one of a few that investigate the link between DEA-based sales performance and performance in market value generation. It contributes methodologically through the adoption of fundamental analysis principles in estimating efficiency in the two performance dimensions and the development of a DEA efficiency model in the presence of negative data.

Citation

Tsolas, I. (2014), "DEA performance assessment of Greek listed metallurgical firms", Journal of Modelling in Management, Vol. 9 No. 1, pp. 58-77. https://doi.org/10.1108/JM2-07-2010-0031