Restricting the flexibility in DEA models

DEA models have been applied as the benchmarking tool in operations management to empirically account operational and productive efficiency. The wide flexibility in assigning the weights in DEA approach can result on indicators of efficiency who do not take account the relative importance of some inputs. In order to overcome this limitation, in this research we apply the DEA model under restricted weight specification. This model is applied to Spanish hotel companies in order to measure operational efficiency. The restricted weight specification enables us to decrease the influence of assigning unrealistic weights in some units and improve the efficiency estimation and to increase the discriminating potential of the conventional DEA model.

Does partial privatisation improve performance? Evidence from a chain of hotels in Portugal

This article contributes to the literature by testing six research hypotheses regarding the impact of partial privatisation on firms' performance. We measure performance using Data Envelopment Analysis (DEA), the Malmquist Index and ratios related to labour productivity, profitability and capacity utilisation. We use the Wilcoxon Signed Rank test to compare the performance after privatisation with that before privatisation. The hypotheses are tested with data from a chain of Portuguese heritage hotels, partially privatised in 2003. We conclude that productivity growth after privatisation is superior to productivity growth before privatisation due to technological progress. However, due to a frontier regress observed in the privatisation year, total factor productivity and profitability deteriorated after privatisation. This suggests that both efficiency changes and frontier shifts should be taken into account in order to accurately assess the impact of privatisation.