Measuring Firm and Sector Efficiency in Pakistan: An Application of Data Envelopment Analysis

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Abstract

This study aims to determine the firm and sector efficiency using data envelopment analysis for 121 listed firms, 3 from 2004 to 2016. Based on the efficiency score of 1 and 0, DEA analysis results indicate that 10% firm was highly efficient in the whole sample, 80% are semi-efficient in selected sectors and 10% slightly inefficient. Thus, we can conclude that all firms are not equally efficient. Also, the study used a Logit/ Probit Regression model, and results indicate that the brand value and type of sector has a positive impact on firm efficiency. The study concludes that Brand value increases firm efficiency, so managers should put more focus on building firm brand value.

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