Inefficiency countervailed DEA (IC-DEA) method for assessing corporate environmental performance

Abstract

Data envelopment analysis (DEA) is a method frequently used to evaluate relative firm performance. However, high values in a few indicators can lead to a company being regarded as 'efficient', despite valuing poorly in other essential indicators. The Inefficiency Countervailed DEA (IC-DEA) method is thus developed. The method first defines an inefficient frontier using the proposed Reverse DEA (RDEA) model. An IC-DEA value is then determined by summing both the DEA and RDEA values. The IC-DEA method was applied to assess the environmental performance of major opto-electronic companies in Taiwan, demonstrating its applicability. Journal of the Operational Research Society (2012) 63, 470-477. doi: 10.1057/jors.2011.56 Published online 8 June 2011