IDEAS home Printed from https://ideas.repec.org/a/rbs/ijbrss/v11y2022i6p74-85.html
   My bibliography  Save this article

Measuring the technical efficiency of the listed IT companies: Evidence from Bangladesh

Author

Listed:
  • Mohammad Kamal Hossain

    (Jashore University of Science and Technology)

  • Md Abdus Salam

    (Jashore University of Science and Technology)

  • Afsana Nahid

    (Jashore University of Science and Technology)

Abstract

This study aimed to measure the technical efficiency of information technology (IT) companies listed on the Dhaka Stock Exchange (DSE) in Bangladesh. It included ten listed IT companies for the period 2016–2020. The input-oriented Data Envelopment Analysis (DEA) approach was used to measure technical efficiency. This study used two inputs, such as fixed assets and capital expenditure, and three outputs, such as return on equity, return on assets, and total income, to measure technical efficiency. All the required data were collected from publicly available annual reports, the sample companies’ websites, and the website of DSE. The study found that Bangladeshi-listed IT companies were not adequately technically efficient, with an average efficiency score of 56.6 percent, requiring a 43.6 percent improvement in efficiency during the period 2016–2020. This inefficiency was due primarily to pure technical inefficiency followed by scale inefficiency. The findings of the study are expected to provide important and useful information to the Bangladesh Association of Software and Information Services (BASIS), the Bangladesh Computer Council (BCC), the ICT Division of the Bangladesh government, and the sample companies. Key Words:Technical Efficiency, Information Technology, Data Envelopment Analysis, Bangladesh

Suggested Citation

  • Mohammad Kamal Hossain & Md Abdus Salam & Afsana Nahid, 2022. "Measuring the technical efficiency of the listed IT companies: Evidence from Bangladesh," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(6), pages 74-85, September.
    • Handle: RePEc:rbs:ijbrss:v:11:y:2022:i:6:p:74-85
    DOI: 10.20525/ijrbs.v11i6.1979
    as

    Download full text from publisher

    File URL: https://www.ssbfnet.com/ojs/index.php/ijrbs/article/view/1979/1387
    Download Restriction: no
    File URL: https://doi.org/10.20525/ijrbs.v11i6.1979
    Download Restriction: no
    File URL: https://libkey.io/10.20525/ijrbs.v11i6.1979?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Shinkai, Naoko & Hossain, Monzur, 2011. "Productivity and Performance of IT Sector in Bangladesh: Evidence from the Firm Level Data," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 34(2), pages 1-22, June.
    2. William W. Cooper & Lawrence M. Seiford & Joe Zhu, 2011. "Data Envelopment Analysis: History, Models, and Interpretations," International Series in Operations Research & Management Science, in: William W. Cooper & Lawrence M. Seiford & Joe Zhu (ed.), Handbook on Data Envelopment Analysis, chapter 0, pages 1-39, Springer.
    3. Khalid Mehmood Alam & Li Xuemei & Saranjam Baig & Li Yadong & Akber Aman Shah, 2020. "Analysis of Technical, Pure Technical and Scale Efficiencies of Pakistan Railways Using Data Envelopment Analysis and Tobit Regression Model," Networks and Spatial Economics, Springer, vol. 20(4), pages 989-1014, December.
    4. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    5. William W. Cooper & Lawrence M. Seiford & Joe Zhu (ed.), 2011. "Handbook on Data Envelopment Analysis," International Series in Operations Research and Management Science, Springer, number 978-1-4419-6151-8, December.
    6. Md. Shakil Ahmed & M. Daud Ahmed, 2013. "Efficiency Variation of Manufacturing Firms: A Case Study of Seafood Processing Firms in Bangladesh," Review of Economics & Finance, Better Advances Press, Canada, vol. 3, pages 45-56, May.
    7. Chien Wang & Ram Gopal & Stanley Zionts, 1997. "Use of Data Envelopment Analysis in assessing Information Technology impact on firm performance," Annals of Operations Research, Springer, vol. 73(0), pages 191-213, October.
    8. J. David Cummins & Jack VanDerhei, 1979. "A Note on the Relative Efficiency of Property-Liability Insurance Distribution Systems," Bell Journal of Economics, The RAND Corporation, vol. 10(2), pages 709-719, Autumn.
    9. William W. Cooper & Lawrence M. Seiford & Kaoru Tone, 2006. "Introduction to Data Envelopment Analysis and Its Uses," Springer Books, Springer, number 978-0-387-29122-2, January.
    10. Xiaohong Chen & Xiaoding Wang & Desheng Dash Wu & Zejing Zhang, 2011. "Analysing firm performance in Chinese IT industry: DEA Malmquist productivity measure," International Journal of Information Technology and Management, Inderscience Enterprises Ltd, vol. 10(1), pages 3-23.
    11. McConnell, John J. & Muscarella, Chris J., 1985. "Corporate capital expenditure decisions and the market value of the firm," Journal of Financial Economics, Elsevier, vol. 14(3), pages 399-422, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Matthias Klumpp & Dominic Loske, 2021. "Sustainability and Resilience Revisited: Impact of Information Technology Disruptions on Empirical Retail Logistics Efficiency," Sustainability, MDPI, vol. 13(10), pages 1-20, May.
    2. Aziz KUTLAR & Ali KABASAKAL & Adem BABACAN, 2015. "Dynamic Efficiency of Turkish Banks: a DEA Window and Malmquist Index Analysis for the Period of 2003-2012," Sosyoekonomi Journal, Sosyoekonomi Society, issue 23(24).
    3. Resul TELLI & Zehra Vildan SERIN, 2023. "A Comparative Analysis on Healthcare Spending Efficiency Among the G-8 Countries and Turkey," Journal of Economic Policy Researches, Istanbul University, Faculty of Economics, vol. 10(1), pages 281-302, January.
    4. Gardijan Kedžo, Margareta & Lukač, Zrinka, 2021. "The financial efficiency of small food and drink producers across selected European Union countries using data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 291(2), pages 586-600.
    5. Fazlollahi, Ariyan & Franke, Ulrik, 2018. "Measuring the impact of enterprise integration on firm performance using data envelopment analysis," International Journal of Production Economics, Elsevier, vol. 200(C), pages 119-129.
    6. Margareta Gardijan & Zrinka Lukač, 2018. "Measuring the relative efficiency of the food and drink industry in the chosen EU countries using the data envelopment analysis with missing data," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 26(3), pages 695-713, September.
    7. Imanirad, Raha & Cook, Wade D. & Aviles-Sacoto, Sonia Valeria & Zhu, Joe, 2015. "Partial input to output impacts in DEA: The case of DMU-specific impacts," European Journal of Operational Research, Elsevier, vol. 244(3), pages 837-844.
    8. Petridis, Konstantinos & Malesios, Chrisovalantis & Arabatzis, Garyfallos & Thanassoulis, Emmanuel, 2013. "Efficiency analysis of forestry journals: Suggestions for improving journals’ quality," Journal of Informetrics, Elsevier, vol. 7(2), pages 505-521.
    9. Shaher Z Zahran & Jobair Bin Alam & Abdulrahem H Al-Zahrani & Yiannis Smirlis & Stratos Papadimitriou & Vangelis Tsioumas, 2017. "Analysis of port authority efficiency using data envelopment analysis," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 19(3), pages 518-537, August.
    10. Ibrahim Alnafrah, 2021. "Efficiency evaluation of BRICS’s national innovation systems based on bias-corrected network data envelopment analysis," Journal of Innovation and Entrepreneurship, Springer, vol. 10(1), pages 1-28, December.
    11. Abbas Mardani & Dalia Streimikiene & Tomas Balezentis & Muhamad Zameri Mat Saman & Khalil Md Nor & Seyed Meysam Khoshnava, 2018. "Data Envelopment Analysis in Energy and Environmental Economics: An Overview of the State-of-the-Art and Recent Development Trends," Energies, MDPI, vol. 11(8), pages 1-21, August.
    12. 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.
    13. Jaime Bonet-Morón & Jhorland Ayala-García, 2016. "La brecha fiscal territorial en Colombia," Documentos de trabajo sobre Economía Regional y Urbana 235, Banco de la Republica de Colombia.
    14. Wei Dong & Tao Wang, 2022. "Research on efficiency measurement of information industry chain integration based on multiple structures and its application in carbon management industrial park [Measuring efficiency in the hotel," International Journal of Low-Carbon Technologies, Oxford University Press, vol. 17, pages 421-429.
    15. Sarmento, Joaquim Miranda & Renneboog, Luc & Verga-Matos, Pedro, 2017. "Measuring highway efficiency : A DEA approach and the Malquist index," Other publications TiSEM 23264815-321e-45a3-83ee-9, Tilburg University, School of Economics and Management.
    16. Eleftherios Kourtis & Michael Kourtis & Panayiotis Curtis & Michael Hanias, 2022. "Sustainable Business Growth, Value Creation and Dynamic Competitive Advantage: The Greek Pharmaceutical Industry," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 46-79.
    17. Thi Ngan Pham & Phung Phi Tran & Minh-Hieu Le & Hoang Nhi Vo & Cong Dat Pham & Hai-Dang Nguyen, 2022. "The Effects of ESG Combined Score on Business Performance of Enterprises in the Transportation Industry," Sustainability, MDPI, vol. 14(14), pages 1-17, July.
    18. Neumann, Anne & Nieswand, Maria & Schubert, Torben, 2016. "Estimating Alternative Technology Sets in Nonparametric Efficiency Analysis: Restriction Tests for Panel and Clustered Data," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 45(1), pages 35-51.
    19. Yang Li & An-Chi Liu & Shu-Mei Wang & Yiting Zhan & Jingran Chen & Hsiao-Fen Hsiao, 2022. "A Study of Total-Factor Energy Efficiency for Regional Sustainable Development in China: An Application of Bootstrapped DEA and Clustering Approach," Energies, MDPI, vol. 15(9), pages 1-13, April.
    20. Nikolaos Oikonomou & Yannis Tountas & Argiris Mariolis & Kyriakos Souliotis & Kostas Athanasakis & John Kyriopoulos, 2016. "Measuring the efficiency of the Greek rural primary health care using a restricted DEA model; the case of southern and western Greece," Health Care Management Science, Springer, vol. 19(4), pages 313-325, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rbs:ijbrss:v:11:y:2022:i:6:p:74-85. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Umit Hacioglu (email available below). General contact details of provider: https://edirc.repec.org/data/ssbffea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.