Using Malmquist index to select the strategic partners in vertical integration: the case of Taiwan LED supply chain

ABSTRACT

In recent years, green technology efficiency has been one of the most interesting issues when referring to energy saving. The light-emitting diode (LED) is one of the competitive industries on green technology in Taiwan. The objective of this article is to select the vertical strategic partners of the 22 LED companies through investigating performance of integration. The Malmquist productivity index (MPI) is used to evaluate the average efficiency change from 2011 to 2015. The empirical results show that the productivity change was influenced by both catch-up effects and frontier effects. For upstream companies, the MPI of Tekcore is superior to others because it maintained technical efficiency and technological change. For downstream companies, most of them are performed well in technical efficiency than technological change. This article helps LED manufacturers select the appropriate strategic partners to achieve competitive advantage.

KEYWORDS:

• Light-emitting diode
• Malmquist productivity index
• vertical integration
• strategic partners

JEL CLASSIFICATION:

• D70
• O10

Disclosure statement

Chia-Nan Wang, Hong-Xuyen Thi Ho, Shih-Hsiung Luo and Yu-Shiuan Yang declare that we have NO affiliations with or involvement in any organization or entity with any financial interest (such as honoraria; educational grants; participation in speakers’ bureaus; membership, employment, consultancies, stock ownership, or other equity interest; and expert testimony or patent-licensing arrangements) or nonfinancial interest (such as personal or professional relationships, affiliations, knowledge or beliefs) in the subject matter or materials discussed in this manuscript.

Additional information

Funding

This study did not receive any funding.