An Evaluation of Leasing Companies' Efficiency Through Data Envelopment Analysis: A Study on Selected Firms of Bangladesh

An Evaluation of Leasing Companies' Efficiency Through Data Envelopment Analysis: A Study on Selected Firms of Bangladesh

Syed Khaled Rahman
Copyright: © 2020 |Pages: 22
DOI: 10.4018/IJPMPA.2020070101
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Abstract

The purpose of the study was to measure and decompose total factor productivity efficiency (TFPE) into technical, scale, and mix efficiency with a view to explore weak efficiency dimension of 22 leasing companies (2013-2017) through DEA in a constant return to scale approach. Indices are used they satisfy all economically relevant axioms and tests from index number theory by making reliable multi-temporal and/or multi-lateral comparisons of efficiency. Three input and two output variables from published reports of sample firms were used to measure efficiency. It is seen that average TFPE of all leasing firms is only 31.86% while the average OTE is 64.28%. By using the same input firms can increase their output by 47.1%. IME of the firms is healthy (0.7821) which means that firms are at satisfactory efficiency level in mixing their inputs. There are opportunities for firms to increase efficiency by operating at MPSS on an unrestricted frontier. Except for RISE, efficiency measures are not significantly different from one year to another rather differ from one firm to another.
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Research Questions

The following research questions have been arisen:

  • 1.

    What is the level of aggregate productivity of leasing firms for the study period?

  • 2.

    How aggregate productivity is decomposed into technical, mix, and scale efficiency dimension and what is the efficiency score of leasing firms in each dimension?

  • 3.

    Are efficiency scores of leasing firms significantly different from one year to another or from one firm to another?

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