Performance Evaluation in Macroeconomics based on DEA Malmquist Index with a New Approach for the Efficiency Evaluation in a Two-Stage Process

Abstract

The goal of this work is to know and evaluate the macroeconomic development progress dynamics based on the Malmquist index by also giving a new and as explicit as possible approach to the evaluative reasoning of the DMUs’ overall performance. The calculation of the DEA (Data envelopment analysis) Malmquist index and of its composing components in coordination with the DMUs’ ranking positions opens up perspectives for a broad comprehensive and evaluative study. Rankings and the Malmquist index are, each in its-self, a performance test. To coordinate these two tests in as organic as possible way, two factors, the so called Z1 and Z2 “statistical” indicators are used in this work. They are expressed as functions (given by the formula, by further calculating the geometric mean of their values) in the evaluation of the overall performance. In this work, the effects of each variable factor are analyzed. A new approach, studied as a two-stage process, is given here. The inserted intermediate variable factors are not simply dealt with as “exogenous” variables fixed in the approach of the two-stage process, but they are considered as included in the total system of the studied variables set (input-output). To interpret the advantages and disadvantages that support the macroeconomic development dynamics, along with the indication of the best practices, the factors that affect the inefficient DMUs are studied. The study covers the 2015-2020 period of time and includes 19 European region countries.