A comparative evaluation of operational efficiency of wood industry using data envelopment analysis and malmquist productivity index: The cases of Slovenia and Croatia

Abstract

The wood industry, as a traditional sector, represents a very important part of the economy in terms of ensuring a sustainable development of society and transition to a low-carbon society in both countries studied, Slovenia and Croatia. For its further development, it is crucial to know the current position of the industry. The best way to achieve this is an analysis of financial data and international comparative evaluation of its operational efficiency. The aim of the research is to compare the relative efficiency of the wood industry using Data Envelopment Analysis (DEA) and the Malmquist Productivity Index (MI), focusing on the Slovenian and Croatian wood industry sectors (C16 and C31) for a recent five-year period (from 2013-2017). With this purpose, the combined measure DEA/MI was applied. The analysis includes only the highest rated companies with more than five employees, divided into 12 clusters regarding the company size. As a result, it was established that clusters CRO-C31- micro, CRO-C16-micro and SI-C16-larger have the highest operational efficiency, due to the effects of different financial indicators, especially activity and liquidity ratios. In general, within the grouped clusters regarding country and subsector, groups SI-C16 and CRO-C31 achieve the highest values for the average of weighted score of efficiency, while CRO-C16 achieves the lowest values.