Measuring the performance of Internet companies using a two-stage data envelopment analysis model

Abstract

In exploring the business operation of Internet companies, few researchers have used data envelopment analysis (DEA) to evaluate their performance. Since the Internet companies have a two-stage production process: marketability and profitability, this study employs a relational two-stage DEA model to assess the efficiency of the 40 dot com firms. The results show that our model performs better in measuring efficiency, and is able to discriminate the causes of inefficiency, thus helping business management to be more effective through providing more guidance to business performance improvement.

Keywords:

• Internet companies
• efficiency
• data envelopment analysis (DEA)
• performance measurement
• two-stage production process
• e-business
• enterprise information systems

Acknowledgements

The authors are grateful to reviewers for their insightful comments and constructive suggestions that helped to improve the previous version of this paper significantly. We also gratefully acknowledge the help from Douglas Vogel, Johanna Vogel, Xiaohu Fang and Jibao Gu. Special thanks go to Weilin Cao and Jianqin Lu.