Efficiency of APEC region ports: an approach introducing weights restrictions in DEA

Purpose - This paper introduces a revenue efficiency data envelopment analysis (DEA) model with weight restrictions and variable returns to scale, designed to evaluate the efficiency of 38 ports in the Asia–Pacific Economic Cooperation (APEC) region. Design/methodology/approach - The methodology used is the analysis of the data envelope, where the technical, cost and allocative efficiency is calculated with the incorporation of weight restrictions aimed at preventing the generation of unrealistically high efficiency scores. Findings - The findings indicate that the implementation of weight restrictions successfully eliminated outliers. However, there was a general decrease in efficiency across three key measures: technical, revenue and allocative. In the realm of allocative efficiency, none of the ports reached a perfect score. Practical implications - The major contribution of this research is that despite numerous studies on port efficiency utilizing DEA methodology, none have integrated weight restrictions into overall efficiency assessments. Therefore, the study’s objective is to gauge revenue efficiency, dissected into technical and allocative efficiency, across 38 ports in the APEC region. This is achieved through the implementation of weight restrictions alongside variable returns to scale. Originality/value - The major contribution of this research is that despite numerous studies on port efficiency utilizing DEA methodology, none have integrated weight restrictions into overall efficiency assessments.