Super-efficiency Slack-based Measure Research Articles

Efficiency of banks in Malaysia: A super efficiency approach

The stability of the economic system of a country very much depends on its banking industry. Data Envelopment Analysis (DEA) has been applied widely for measuring efficiency of banks. Limited studies, however, have employed the radial and non-radial DEA models to evaluate efficiency of banks without considering the ranking of the fully efficient banks since those banks have the same efficiency score. Considering the weakness of the radial and non-radial DEA, this paper aims to calculate the banks efficiency of nine commercial banks in Malaysia from 2004 to 2013 by adopting the two-stage of super efficiency slack-based measure (SE-SBM) model. This model can discriminate between the efficient banks and recalculate their efficiency scores. Then, the selected banks were able to be ranked according to their final efficiency scores. Moreover, comparative analyses of the efficiency of the banks and the year-wise efficiency of the selected banks were also conducted. The methodology consists of two stages. In the first stage the SBM model is run to classify efficient and inefficient banks. In the second stage the super efficiency model is run to rank the efficient banks obtained from the first stage by calculating their super efficiency scores. Our empirical results show that: (1) the efficiency status of the banks fluctuated over the examined period, the high number of the efficient banks is achieved in the years 2006 and 2008, while the year 2012 has the lowest number of the efficient banks. (2) the ranking of the banks fluctuated in the studied period. (3) most of the banks are inefficient in terms of their average efficiency scores. This paper has two limitations. First, the paper did not integrate undesirable output, despite it deals with non-interest income. Second, performance evaluation of Malaysian commercial banks was only compared among the Malaysian banks.

Measuring regional transport sustainability using super-efficiency SBM-DEA with weighting preference

Abstract The development of transportation sector promotes China's rapid economic growth, but also brings a negative impact to China's society and environment such as pollution and energy waste. However, limited attention has been paid to China's transportation system, especially in terms of transport sustainability evaluation at a regional level. In this study, we first propose a new indicator system that involves systematic, economic, social and environmental indicators for measuring regional transport sustainability. Then, we propose an improved super-efficiency slacks-based measure DEA (SBM-DEA) model with weighting preference to evaluate the regional transport sustainability efficiency. An empirical application to measuring transport sustainability in Shaanxi province, China, during the period of 2000–2015 is presented to show the effectiveness of the proposed model. The empirical results show that Shaanxi's transport sustainability over half of the years is inefficient and its main reason is that the efficiency of environmental and social dimensions is low. Compared the result with that obtained by the SBM-DEA model without weighting preference, the number of effective decision-making units is reduced by the proposed DEA model. Computational results show that the evaluation result is generally in line with the reality.

Exploring the effect of industrial structure adjustment on interprovincial green development efficiency in China: A novel integrated approach

Industrial structure adjustment is one of the effective measures for achieving green development. Aiming at improving green development efficiency through industrial structure adjustment, this study proposes a novel integrated approach incorporating industrial structure adjustment measurement, super-efficiency slacks-based measure with undesirable outputs and panel regression models to explore the effect of industrial structure adjustment on green development efficiency. Taking the provincial data of China from 1999 to 2016 as an example, the empirical results show that during the study period, China's provincial industrial structure rationalizations and advancements have three trends, i.e. rising, U-shaped and inverted U-shaped. In the meantime, China's provincial green development efficiency also has three trends, i.e. rising, falling and U-shaped. Industrial structure rationalization and advancement both have a positive effect on green development efficiency. Compared with the industrial structure rationalization, the advancement has a greater effect on green development efficiency. Environmental protection, urbanization, energy conservation and emission reduction policy are conducive to improving green development efficiency. However, human capital and openness have a negative effect on green development efficiency.

Research on Total Factor Productivity and Influential Factors of the Regional Water-Energy-Food Nexus: A Case Study on Inner Mongolia, China.

With the supply of water, energy and food facing severe challenges, there has been an increased recognition of the importance of studying the regional water–energy–food nexus. In this paper, Inner Mongolia, including 12 cities in China, was selected as a research case. A super-efficiency slack based measure (SBM) model that considered the undesirable outputs was adopted to calculate the regional total factor productivity (TFP) and the Malmquist–Luenberger index was used to investigate the change trend of the TFP from 2007 to 2016 based on understanding the water–energy–food nexus. Finally, influential factors of the TFP were explored by Tobit regression. The results show that the 12 Inner Mongolia cities are divided into higher, moderate and lower efficiency zones. The higher efficiency zone includes Ordos, Hohhot, Xing’an, and Tongliao, and the lower efficiency zone includes Chifeng, Xilin Gol, Baynnur, Wuhai and Alxa. There is a serious difference in TFP between Inner Mongolia cities. During the study period, the TFP of the water–energy–food nexus in Inner Mongolia cities shows a rising trend, which is mainly driven by the growth of technical progress change. However, the average ML values of the lower and moderate efficiency zones were inferior to the higher efficiency zone in six of the ten years, so the difference between Inner Mongolia cities is growing. According to the Tobit regression, the mechanization level and degree of opening up have positive effects on the TFP, while enterprise scale and the output of the third industry have negative effects on the TFP. Government support does not have any significant impact on the TFP. Finally, suggestions were put forward to improve the TFP of the water–energy–food nexus in Inner Mongolia cities.

Temporal–spatial characteristics of urban land use efficiency of China’s 35mega cities based on DEA: Decomposing technology and scale efficiency

This study aims to measure the comprehensive, pure technical, and scale efficiencies of urban land use of China’s 35 mega cities from 2008 to 2015 and reveal their temporal and spatial characteristics of urban land use efficiency (ULUE) using a super efficiency slack-based measure (SBM) model. Results show that 1) the ULUE level of China’s 35 mega cities is relatively low, and the pure technical efficiency is a major influencing factor of the comprehensive efficiency. 2) From a temporal perspective, the comprehensive, pure technical, and scale efficiencies of the 35 mega cities all show a trend of slow growth; the average annual growth rates of these efficiencies are 1.07%, 0.24%, and 1.16%. 3) From a spatial perspective, the ULUE levels are quite different and show certain regional patterns. 4) The distribution of scale efficiency of urban land use in China is becoming increasingly dispersed from 2008 to 2015, whereas the distribution of pure technical efficiency is becoming increasingly concentrated in the same period. Estimations on pure technical and scale efficiencies are important to investigate the deep-rooted causes of land use inefficiency for filling an important knowledge gap in ULUE studies.

Study on the Evolution of Water Resource Utilization Efficiency in Tibet Autonomous Region and Four Provinces in Tibetan Areas under Double Control Action

Tibet is the province with the largest international rivers and water resource reserves in China. However, due to its special ecological environment, the utilization of water resources has become an inevitable problem. Considering the undesirable outputs in water resource utilization, the Super-efficiency Slack-based Measure (SE-SBM) model is used to measure water utilization efficiency of Tibet and the Tibetan areas (four provinces where Tibetan areas are located) from 2006 to 2016. The mixed and random panel Tobit model is used to investigate the driving factors of water efficiency and a horizontal comparison between provinces is made on this basis. The results show that the water utilization efficiency of Tibet and the Tibetan areas in four provinces shows a “U-shaped” trend. The water utilization efficiency of most provinces is greater than or close to 1 and the water utilization efficiency of each province shows a constant convergence trend. Environmental regulation and technological innovation have a significant positive effect on water utilization efficiency. Urbanization and foreign direct investment (FDI) have a significant negative effect on water utilization efficiency. Per capita Gross Domestic Product (GDP) and water resource endowment have no significant effect on water utilization efficiency. It is necessary to select a new type of urbanization suitable for the Tibetan Plateau, eliminate the backward production capacity, high water consumption, or high emissions industries, and to strengthen the research and development of water-saving and emission-reduction technology innovation in Tibet.

The Effects of Urban Sprawl and Industrial Agglomeration on Environmental Efficiency: Evidence from the Beijing–Tianjin–Hebei Urban Agglomeration

Environmental efficiency evaluation is an effective way to assess the synergetic development degree between the economy and environment. In order to realize the mechanism of the effects of urban sprawl and industrial agglomeration on environmental efficiency by using the super efficiency Slacks-based Measure (SBM) model with undesirable outputs, this paper firstly calculates the environmental efficiency of the 13 cities in the Beijing–Tianjin–Hebei urban agglomeration from 2006 to 2017. Then, based on the panel data of the 13 cities, we empirically examine the influence of urban sprawl and industrial agglomeration on environmental efficiency by adopting the panel Tobit regression model. The results show that large gaps exist in the degree of the cities’ environmental efficiency in the research period, and only Beijing’s environmental efficiency exhibits full efficiency in the 13 cities, with the overall environmental efficiency of the Beijing–Tianjin–Hebei urban agglomeration presenting a decreasing trend. Additionally, the Tobit regression results indicate that urban sprawl has a significantly negative impact on environmental efficiency, but with the continual improvement of industrial agglomeration, the negative effects of urban sprawl will be partially offset. From the regression results of control variables, economic growth and urbanization developments have an inhibiting effect on the promotion of environmental efficiency. Furthermore, industrial structure optimization and technological innovation are helpful to improve environmental efficiency. The opening-up policy has had a significantly positive impact on environmental efficiency, and the “pollution paradise” hypothesis was untenable in the Beijing–Tianjin–Hebei urban agglomeration.

Infrastructure Operation Efficiency and Influential Factors in Developing Countries: Evidence from China

The development of sustainable infrastructure has been identified as one of the seventeen sustainable development goals by the United Nations. Keeping the operation of infrastructure sustainable in terms of economy becomes a major challenge in developing countries. The objective of this research is to evaluate the operation efficiency of the expressway and explore the key influential factors. This research took expressway mileage as the physical output and evaluated the operation efficiency of the expressway companies based on the super-efficiency Slacks-Based Measure (SBM) model; additionally, we analyzed the influential factors on the basis of the fixed-effects regression model. The results showed the following: (1) The average value of operation efficiency of China’s expressway companies from 2007 to 2017 was 0.904. In general, the operation of expressways was efficient. However, the differences in operation efficiency among the eleven expressway companies were significant, and some companies were seriously inefficient. (2) The asset–liability ratio, the scale, and the structure of property rights in the companies were shown to be the main factors affecting the operation efficiency. These results indicate that the development of innovative financing modes and optimization of the scale of each company are the key directions for infrastructure reform, which could eventually narrow the differences in operation efficiency and allow the development of sustainable infrastructure.

Measuring the Efficiency of Community Colleges Using Super Efficiency Approach for the Case of Non-discretionary Factors in Data Envelopment Analysis with Sensitivity Analysis

Malaysian community colleges play a significant role in achieving Malaysia's vision to be a developed country in 2020. For this reason, their efficiency should appropriately be measured. However, their efficiency measurement using a conventional data envelopment analysis (DEA) model is not appropriate since some of their inputs; e.g., entrant and enrolment students are non-discretionary while a part of output of their graduate employability is discretionary. This paper thus proposes an alternative approach of super efficiency slack-based measure for the case of non-discretionary factors in DEA. The proposed approach was used to evaluate the efficiency of 25 main campuses of Malaysian community colleges from 2012 to 2013. The results support the decision maker of Malaysian community colleges to discriminate and rank efficient and inefficient community colleges in the presence of both super efficiency and non-discretionary factors. The significance of inputs-outputs on efficiency status was tested by sensitivity analysis.

Efficiency evaluation of hotel operations in Mainland China based on the superefficiency SBM model

This research evaluated the efficiency of hotels in 31 provinces and 4 regions (Eastern, Western, Central, and Northeastern China) using the superefficiency slacks-based measure model. The reasons for operational inefficiency were assessed from two perspectives: input redundancy and output shortfalls. Most hotels were found to have operational inefficiencies, and there is a significant scope for future improvement. The relative efficiency of hotel operations by the four regions was as follows: Eastern China > Central China > Western China > Northeastern China. The efficiency of hotels demonstrated differing coefficients of variation. The most significant coefficient of variation was for Western China, and the smallest was for Northeastern China. The primary cause of inefficiencies was in input redundancies, especially the high degree of input redundancy in number of hotels, employees, and rooms. Also, to some degree, differences exist among the four regions in operational inefficiencies.

What Is the Efficiency of Fast Urbanization? A China Study

Urbanization is commonly described as the process of population flow from rural to urban areas. As the largest developing country, China has experienced an unprecedentedly fast and large urbanization process since 1980s, which will continue for the coming future. The immense scale of the process has brought multidimensional benefits across all sectors in the country, yet also consumed a vast amount of resources and caused various types of environmental problems. The conflict between limited resources and an unstoppable urbanization process has become a pressing issue, which presents the urgent need for efficiency pursuance in the process of urbanization in order to ensure sustainable urban development. It is considered that the improvement of urbanization efficiency in large developing countries such as China has great implications for global sustainability. There is little existing study conducted to understand what efficiency achieved in the current fast urban development era in China. This study investigates the urbanization efficiency and its changes in the contemporary China. A set of input-output indicators are employed for analyzing the efficiency, in which both desirable and undesirable outputs are considered. The Super-efficiency Slack-based Measure (SBM) model and DEA-based Malmquist Production Index (MPI) are adopted collectively for conducting data analysis. The research is conducted at provincial level in China and the data collected for analysis are from 30 provinces for the period of 2006–2015. The results from this study show that the overall urbanization efficiency in China during the surveyed period is low, although certain improvement has been achieved. The difference between good and poor performers is considerable. In general, those provinces with better social and economic background have better urbanization efficiency performance. East China is much better than the rest of China, whilst Southwest region has the poorest performance.

Does Foreign Direct Investment Improve Inclusive Green Growth? Empirical Evidence from China

Inclusive green growth is a sustainable development mode in pursuit of economic growth, social equity, and environmental protection. At present, a large number of articles have discussed the impact of foreign direct investment (FDI) on economic growth, green growth, and inclusive growth. However, the research about inclusive green growth is mainly descriptive. This paper constructs China’s inclusive green growth index and analyzes the impact of FDI on inclusive green growth in China. Specifically, by constructing a super efficiency slacks-based measure model (which has two undesirable outputs: income disparity and environmental pollution) to calculate the Inclusive green growth index, this paper compares and analyses the differences and regional characteristics of China’s total factor productivity, inclusive total factor productivity, green total factor productivity, and inclusive green total factor productivity. We find that total factor productivity is decreasing after considering undesirable output, and the traditional total factor productivity is higher than the inclusive green total factor productivity by 0.112; at the regional level, the trend of the total factor productivity is gradually decreasing from east to west, which indicates that there are regional differences in inclusive green growth of China, and there is room for improvement. Meanwhile, we construct a panel vector autoregressive model (PVAR) and use generalized impulse response function and variance decomposition to analyse the influence of FDI on China’s inclusive green total factor productivity. The results show that FDI is beneficial to the promotion of inclusive green total factor productivity in China, and environmental pollution in the FDI process is an important factor hindering the inclusive green total factor productivity.

Regional energy efficiency evaluation in China: A super efficiency slack-based measure model with undesirable outputs

Abstract With the rapid development of global economy, the demand for energy has increased significantly. Therefore, energy efficiency improvement is essential for global energy and economic transformation. In the Chinese context, study on the energy efficiency of various provinces can contribute to better understand China’s energy utilization status and provide policy implications for improving China’s energy utilization efficiency. In this study, based on the super efficiency slack-based measure model with undesirable outputs, the energy efficiency of China’s 30 provinces in 2013 and 2014 was investigated. Then, the energy efficiency of the eastern, central and western China was compared and further discussed. Finally, according to the results, the relevant policy implications were put forward. The results showed that China’s overall energy efficiency had decreased while taking the undesirable outputs into consideration. In addition, eastern China had the highest energy efficiency and the energy efficiency of western China was relatively low. The energy efficiency gap among China’s provinces was still large. Therefore, it was necessary to improve China’s overall energy efficiency by developing targeted policies considering regional conditions.

Ecological efficiency in China and its influencing factors-a super-efficient SBM metafrontier-Malmquist-Tobit model study.

Ecological problem is one of the core issues that restrain China's economic development at present, and it is urgently needed to be solved properly and effectively. Based on panel data from 30 regions, this paper uses a super efficiency slack-based measure (SBM) model that introduces the undesirable output to calculate the ecological efficiency, and then uses traditional and metafrontier-Malmquist index method to study regional change trends and technology gap ratios (TGRs). Finally, the Tobit regression and principal component analysis methods are used to analysis the main factors affecting eco-efficiency and impact degree. The results show that about 60% of China's provinces have effective eco-efficiency, and the overall ecological efficiency of China is at the superior middling level, but there is a serious imbalance among different provinces and regions. Ecological efficiency has an obvious spatial cluster effect. There are differences among regional TGR values. Most regions show a downward trend and the phenomenon of focusing on economic development at the expense of ecological protection still exists. Expansion of opening to the outside, increases in R&D spending, and improvement of population urbanization rate have positive effects on eco-efficiency. Blind economic expansion, increases of industrial structure, and proportion of energy consumption have negative effects on eco-efficiency.

Do neighboring prefectures matter in promoting eco-efficiency? Empirical evidence from China

This study investigates the spatial externality of eco-efficiency using a novel panel dataset of 191 prefectural-level cities in China covering the period 2003–2013. We apply an extended data envelopment analysis (DEA) model, while simultaneously considering metafrontier, undesirable outputs, and super-efficiency slack-based measure (Meta-US-SBM) to estimate eco-efficiency. Then, we use a two-regime spatial Durbin model to examine the spatial externality of eco-efficiency. The empirical results indicate that: 1) there are significant spatiotemporal disparities in eco-efficiency and, on average, the eco-efficiency of the eastern region is relatively higher than that of the central and western regions; 2) the kernel density estimations of eco-efficiency of different regions reveal left-skewed distributions; 3) the estimates of the two-regime spatial Durbin model indicate the presence of emulation of higher eco-efficiency by the prefectural-level cities, while the sensitivity analysis indicates that the conclusions are robust for different spatial weighting matrix specifications. The policy implications presented are based on the empirical results.

Developing a two-stage approach of super efficiency slack-based measure in the presence of non-discretionary factors and mixed integer-valued data envelopment analysis

An alternatve approach of super efficiency slack-based measure data envelopment analysis has been proposed to make the projection of an efficient decision making unit strongly-Pareto efficient. The approach however did not examine the simultaneous effect of non-discretionary factors and integer requirements on efficiency measures. To obtain more accurate efficiency measures, this paper proposes a two-stage approach of super efficiency slack-based measure in non-discretionary factors and mixed integer requirements. Both new factors and requirements were first integrated into the existing approach. The optimal solution of the proposed approach was then obtained by transforming its fractional form to a linear form. Thus, the scalar measures of the proposed approach can now deal directly with discretionary mixed integer input saving-output surplus and discretionary mixed integer input excess-output shortfall. The practicability of the proposed approach was tested using empirical data of Malaysian community colleges.

Sectoral energy-environmental efficiency and its influencing factors in China: Based on S-U-SBM model and panel regression model

Abstract Energy use is often accompanied with air emissions including SOx, NOx, CO2, etc. It is essential to consider both the energy and environmental performance of various sectors to ensure better policymaking. This study considered air pollution by calculating energy-environmental efficiency (EEE) at the sectoral level. A few studies have previously applied the slack-based measure (SBM) model to multi-sector EEE assessments. Despite the advantages of SBM model, potential improvements have rarely been proposed. Therefore, a super-efficiency SBM model with undesirable outputs (S-U-SBM) was used to evaluate the EEE of 31 sectors in China. The policy implications of improving EEE, in microcosmic (potential improvement) and macroscopic (influencing factors) terms, were considered. The results indicated that for all sectors there was an overall trend of increasing EEE from 1995 to 2009, except for Rent and Other Business Activities, and Health and Social Work. The average annual potential for energy-saving and emission-reducing measures in all sectors was 1.396 × 1017 J and 7.0780 × 107 tons, respectively. Chemicals and Chemical Materials had the highest potential to save energy and reduce emissions. A panel regression indicated that the relationship between EEE and gross output was U-shaped for all industry, but had an inverted-U shape for heavy industry. Sectoral size, technology, and the proportion of energy demand satisfied by coal significantly influenced EEE.

Development of intuitionistic fuzzy super-efficiency slack based measure with an application to health sector

Abstract Data envelopment analysis (DEA) is a linear programming based technique, which determines the performance efficiencies of homogeneous decision making units (DMUs). Slack based measure (SBM) model finds the performance efficiency, and it deals with the input excesses and output shortfalls of DMUs. In conventional SBM, the data is crisp. But it fluctuates in the real world applications. Such data can take the form of fuzzy/intuitionistic fuzzy (IF) number. In this paper, we propose an IF slack based measure (IFSBM) model to determine the efficiency of DMUs and IF super efficiency SBM (IFSESBM) model to determine the efficiency of efficient DMUs for α in ( 0 , 1 ] and β in [ 0 , 1 ) . Also, we propose a ranking method for intuitionistic fuzzy interval numbers (IFINs) based on α and β -cuts. Finally, a health sector application of the proposed model is presented with two IF inputs: (i) number of beds (ii) number of doctors and two IF outputs: (i) number of pathology operations (ii) number of minor surgeries.

Performance of Chinese hotel segment markets: Efficiencies measure based on both endogenous and exogenous factors

Abstract The hotel industry is a sector of growing significance, and its development is closely related to the regional economy; however, the industry's performance, especially its segment markets are seldom evaluated considering both the hotel and regional situation, which leads to inappropriate business decisions. This paper provides a conceptual understanding of the influence of regional factors on hotel development. Using a super-efficiency slack-based measure in a data envelopment analysis method, this study examines the regional operational efficiency of the mainland China hotel industry, an emerging hospitality market. Key regional factors are screened out by principal component analysis. This study provides an approach for improving the decision-making process of hotel managers by identifying the best performers in the sector to understand and discriminate between different occupancy rates and room prices as sources of performance enhancement. The findings elucitate that there are versatile efficiencies in China's regional hotel market segments.

Environmental efficiency and its determinants in the development of China’s western regions in 2000–2014

ABSTRACTIn this study, we measure the environmental efficiency of western China in 2000–2014 by the super-efficiency slacks-based measure model which considers the undesirable outputs. The results show that the environmental efficiency of western China is low and rank behind in the national level. The environmental efficiency is lower than the traditional efficiency which reflects that the economic growth in 2000–2014 has paid high environmental costs. The difference between the traditional efficiency and environmental efficiency experienced “inverted U”-type trend change. The environmental efficiency of the western provinces presented differentiated developing trend and the differences between the western provinces were enlarging. The environmental efficiency of the western regions was not only lower than that in the eastern regions with a big gap but also lower than that in the central regions. Through the convergence test, we found that the environmental efficiency gap between the western and the easte...