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Pakistani Firms' Efficiency: An Empirical Study of Pakistan Stock Exchange through Data Envelopment Analysis

Author

Listed:
  • Muhammad Nisar Khan

    (PhD Scholar, Abdul Wali Khan University Mardan, Mardan, KP, Pakistan.)

  • Adnan Ahmad

    (Assistant Professor, IBL, Abdul Wali Khan University Mardan, Mardan, KP, Pakistan.)

  • Noor Jehan

    (Assistant Professor, Department of Economics, Abdul Wali Khan University Mardan, Mardan, KP, Pakistan.)

Abstract

This paper investigates listed firm efficiency on Pakistan Stock Exchange by using Data Envelopment Analysis (DEA). The reason for application and calculation of the DEA score is to know how much the firms are efficient in utilizing their resources to be converted into output (sales/Net Income). An optimization technique (DEA) that helps calculate efficiencies of firm’s decision making Units (DMU’s) by taking different inputs and outputs variables. This paper uses DEA in measuring efficiency of 136 Pakistani firms listed on Pakistan Stock Exchange (PSX). Using secondary data set of 136 firms for the period 2008-2017, efficiency measurements are calculated by using financial ratios and financial indicators as input and output variables. Results show that some of the firms are efficient in utilizing their available resources in an efficient way to convert it into output, while some are inconsistent in efficiently utilizing their resources (inputs) to get the desired outputs.

Suggested Citation

  • Muhammad Nisar Khan & Adnan Ahmad & Noor Jehan, 2018. "Pakistani Firms' Efficiency: An Empirical Study of Pakistan Stock Exchange through Data Envelopment Analysis," Global Social Sciences Review, Humanity Only, vol. 3(3), pages 158-174, September.
    • Handle: RePEc:gss:journl:v:3:y:2018:i:3:p:158-174
    DOI: 10.31703/gssr.2018(III-III).10
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    References listed on IDEAS

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    More about this item

    Keywords

    Data Envelopment Analysis; Overall Technical Efficiency; NonFinancial Sectors; Pakistan Stock Exchange (PSX);
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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