Measuring technical inefficiency factors for Thai listed manufacturing enterprises: A stochastic frontier (SFA) and data envelopment analysis (DEA)

This study employs stochastic frontier analysis (SFA) and two-stage DEA approaches to predict firm technical efficiency and analyse an inefficiency effects model for overall Thai listed manufacturing sector enterprises including sub-listed manufacturing sector enterprises using an unbalanced panel data for 178 Thai listed manufacturing enterprises over the period 2000 to 2008. Both estimation approaches are found to produce consistent results for overall Thai listed manufacturing sector enterprises. For sub-listed manufacturing sector enterprises both approaches empirically find quite consistent results in coefficient signs, but significance results from both estimation approaches may be different. Focusing on overall Thai listed enterprises both approaches suggest that leverage (financial constraints), executive remuneration, managerial ownership, exports, some types of listed firms (i.e., family-owned firm, foreign-owned firm, and hybrid-owned firm), and firm size have a negative (positive) and significant effect on technical inefficiency (technical efficiency).The empirical results obtained from both approaches also suggest that liquidity, external financing, and research & development (R&D) have a significantly positive (negative) effect on technical inefficiency (technical efficiency)