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Volume 15
Issue 1
Online publication date 2019-02-08
Title Efficiency analysis by combination of frontier methods: Evidence from unreplicated linear functional relationship model
Author Omar Sharif, Md Zobaer Hasan, Chang Yun Fah, Mahboobeh Zangeneh Sirdari
Abstract
This study proposes a new efficiency measurement technique CDS as combination of data envelopment analysis (DEA) and stochastic frontier analysis (SFA) and compares the CDS efficiency score with the DEA and SFA efficiency scores. The financial companies listed in Malaysian Stock Exchange for the period 2007-2016 are used to estimate the different types of efficiency score. Besides, linear regression analysis and ULFR (unreplicated linear functional relationship) analysis are used to analyze the performance of this CDS technique with the DEA and SFA techniques. The result suggests that the most efficient model is CDS which has a significant positive correlation with profit risk. Among the CDS, DEA and SFA techniques, the recommended technique (CDS) shows higher coefficient of determination values for both ULFR (0.9994) and linear regression (0.292) analysis. Also, based on the results of CDS, this study postulates that the most efficient firm is ACSM (Aeon Credit Service (M) Bhd) and the least efficient firm is MAY (Malayan Banking Bhd).
Citation
References
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Keywords Malaysian Stock Exchange, data envelopment analysis, stochastic frontier analysis, unreplicated linear functional relationship model
DOI http://doi.org/10.5281/zenodo.3969938
Pages 107-125
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