TITLE:
Super Efficiency and Misallocation: Evidence from Vietnamese Electric-Computer Industry
AUTHORS:
Nguyen Khac Minh, Pham Van Khanh, Nguyen Thi Phuong
KEYWORDS:
Misallocation, Super-Efficient, Slack-Based Measured Efficiency
JOURNAL NAME:
American Journal of Operations Research,
Vol.8 No.2,
March
9,
2018
ABSTRACT: Misallocation means that the source is not distributed efficiently. This leads to an important question of how the relationship between misallocation and efficiency is (see [1]). The purpose of this study is to address the empirical relationship between misallocation and efficiency in the electric and computer industry in Vietnam during the 2005-2015 periods. To do this, we built a model that allowed us to evaluate the impact of misallocation and other factors on efficiency. The slack-based measured efficiency (SBM) model (Tone [2]), and the super-efficient model (Tone [3]) are used to estimate the firms’ efficiency. The approach of Hsieh and Klenow [4] is used to measure misallocation in the study area. Estimated results of the model about the relationship between misallocation and efficiency show that the variable representing the misallocation has a negative sign and statistical significance in all models. In other words, the misallocation negatively affects efficiency. The bigger the misallocation, the lower the efficiency.