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Evaluating the potential efficiency gains from optimal industry configuration: A case of life insurance industry of India

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  • Biresh K. Sahoo
  • Kaoru Tone

Abstract

Using data envelopment analysis, this paper presents a scheme to decompose industry efficiency into two components: learning efficiency and harmony efficiency. This decomposition scheme is empirically illustrated on 23 life insurance companies in India for 8 years (2011–2012–2018–2019). Our two broad empirical findings reveal that first, as per the year‐wise results, the Indian life insurance industry has the potential to increase its efficiency by 28% by improving its learning efficiency by 20% and harmony efficiency by 10%; and second, based on the results on the top 75 promising mergers, the potential gains stem from learning rather than harmony.

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  • Biresh K. Sahoo & Kaoru Tone, 2022. "Evaluating the potential efficiency gains from optimal industry configuration: A case of life insurance industry of India," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3996-4009, December.
    • Handle: RePEc:wly:mgtdec:v:43:y:2022:i:8:p:3996-4009
    DOI: 10.1002/mde.3642
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    1. Alireza Amirteimoori & Biresh K. Sahoo & Saber Mehdizadeh, 2023. "Data envelopment analysis for scale elasticity measurement in the stochastic case: with an application to Indian banking," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-36, December.

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