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Application of multiple output data envelopment analysis in interpreting efficiency improvement of enterprise resource planning in integrated circuit firms

Author

Listed:
  • Bi-Huei Tsai*

    (National Chiao Tung University, Taiwan)

  • Shin-Bin Chou

    (LeeMing Institute of Technology, Taiwan)

Abstract

This paper is the first to employ multiple outputs, patents and net sales, in our data envelopment analysis (DEA) to examine whether operational efficiency improves after enterprise resource planning (ERP) installations. The ANOVA analysis results show that granted patent number significantly increases after ERP installations. ERP implementation indeed stimulates integrated circuit firms to concentrate on innovation activities. Also, the DEA results show that firm efficiency significantly increases after the third year subsequent to ERP implementations. The Tobit regression results further prove that the curtailing of receivable turnover days and inventory turnover days are attributed to efficiency elevation through ERP installations.

Suggested Citation

  • Bi-Huei Tsai* & Shin-Bin Chou, 2015. "Application of multiple output data envelopment analysis in interpreting efficiency improvement of enterprise resource planning in integrated circuit firms," Journal of Developing Areas, Tennessee State University, College of Business, vol. 49(1), pages 285-304, January-M.
    • Handle: RePEc:jda:journl:vol.49:year:2015:issue1:pp:285-304
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    Cited by:

    1. Goodness C. Aye & Giray Gozgor & Rangan Gupta, 2020. "Dynamic and Asymmetric Response of Inequality to Income Volatility: The Case of the United Kingdom," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 147(3), pages 747-762, February.

    More about this item

    Keywords

    Enterprise resource planning; ANOVA; Turnover days; Patent; DEA;
    All these keywords.

    JEL classification:

    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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