Least-distance data envelopment analysis model for bankruptcy-based performance assessment

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

In this paper, the use of the Data envelopment analysis(DEA) as a quick-and-easy approach for bankruptcy-based performance assessment is presented. The attractive advantage of DEA is that it can provide an efficient target(improvement goal) for inefficient decision-making units(DMUs). The DMUs under evaluation are divided into two groups: efficient and inefficient, regarding cases of bankruptcy analysis, they are divided into non-default firms and default firms. Moreover, the least-distance(LD)DEA model has been actively researched and applied, because it can provide the closest efficient target that is achievable with the least effort. Thus, using the LD-DEA model for bankruptcy-based performance assessment can give an early warning of a firm's financial performance and provide an improvement goal that can be easily achieved for default firms. As a case study, we demonstrate this approach using financial data of 61 Japanese banks. From the results, we find that our approach provides an improvement goal that can be achieved with fewer total modifications of inputs and outputs compared with that provided by slacks-based measure(SBM) model.

Original languageEnglish
Title of host publication2020 IEEE International Conference on Industrial Engineering and Engineering Management, IEEM 2020
PublisherIEEE Computer Society
Pages235-239
Number of pages5
ISBN (Electronic)9781538672204
DOIs
Publication statusPublished - 2020 Dec 14
Event2020 IEEE International Conference on Industrial Engineering and Engineering Management, IEEM 2020 - Virtual, Singapore, Singapore
Duration: 2020 Dec 142020 Dec 17

Publication series

NameIEEE International Conference on Industrial Engineering and Engineering Management
Volume2020-December
ISSN (Print)2157-3611
ISSN (Electronic)2157-362X

Conference

Conference2020 IEEE International Conference on Industrial Engineering and Engineering Management, IEEM 2020
CountrySingapore
CityVirtual, Singapore
Period20/12/1420/12/17

Keywords

  • Bankruptcy Assessment
  • Closest Efficient Target
  • DEA
  • Least Distance

ASJC Scopus subject areas

  • Business, Management and Accounting (miscellaneous)
  • Industrial and Manufacturing Engineering
  • Safety, Risk, Reliability and Quality

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