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Do market share and efficiency matter for each other? An application of the zero-sum gains data envelopment analysis

Author

Listed:
  • J-L Hu

    (National Chiao Tung University)

  • C-Y Fang

    (National Chiao Tung University
    China University of Technology)

Abstract

Current studies that use traditional data envelopment analysis (DEA) neglect the 100% market share restriction. This study adopts zero-sum gains data envelopment analysis to measure the efficiency scores of securities firms (SFs) and indicates that the traditional DEA model underestimates the efficiency scores of inefficient SFs. This research analyses 266 integrated securities firms in Taiwan from 2001 to 2005 and employs three inputs (fixed assets, financial capital, and general expenses) and a single output (market share). The foreign-affiliated ownership of SFs positively affects the efficiency scores. The two-stage least squares procedure confirms that the market share and efficiency score simultaneously reinforce each other.

Suggested Citation

  • J-L Hu & C-Y Fang, 2010. "Do market share and efficiency matter for each other? An application of the zero-sum gains data envelopment analysis," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 61(4), pages 647-657, April.
    • Handle: RePEc:pal:jorsoc:v:61:y:2010:i:4:d:10.1057_jors.2009.11
    DOI: 10.1057/jors.2009.11
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    7. Lozano, Sebastián, 2023. "Bargaining approach for efficiency assessment and target setting with fixed-sum variables," Omega, Elsevier, vol. 114(C).
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    9. Thanasis Bouzidis & Giannis Karagiannis, 2022. "Extending the zero-sum gains data envelopment analysis model," Journal of Productivity Analysis, Springer, vol. 58(2), pages 171-184, December.
    10. Nguyen, Thien Hoang & Nguyen, Xuan Minh & Nguyen, Thi Thu Ha & Tran, Quoc Trung, 2017. "Ownership structure and performance of professional service firms in a declining industry: Evidence from Vietnamese securities firms1," Business and Economic Horizons (BEH), Prague Development Center (PRADEC), vol. 13(2).
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    12. Milioni, Armando Zeferino & de Avellar, José Virgílio Guedes & Gomes, Eliane Gonçalves & Soares de Mello, João Carlos Correia Baptista, 2011. "An ellipsoidal frontier model: Allocating input via parametric DEA," European Journal of Operational Research, Elsevier, vol. 209(2), pages 113-121, March.
    13. Demirbag, Mehmet & McGuinness, Martina & Akin, Ahmet & Bayyurt, Nizamettin & Basti, Eyup, 2016. "The professional service firm (PSF) in a globalised economy: A study of the efficiency of securities firms in an emerging market," International Business Review, Elsevier, vol. 25(5), pages 1089-1102.
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