Application of multiple output data envelopment analysis in interpreting efficiency improvement of enterprise resource planning in integrated circuit firms

Bi-Huei Tsai* () and Shin-Bin Chou
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Bi-Huei Tsai*: National Chiao Tung University, Taiwan
Shin-Bin Chou: LeeMing Institute of Technology, Taiwan

Journal of Developing Areas, 2015, vol. 49, issue 1, 285-304

Abstract: This paper is the first to employ multiple outputs, patents and net sales, in our data envelopment analysis (DEA) to examine whether operational efficiency improves after enterprise resource planning (ERP) installations. The ANOVA analysis results show that granted patent number significantly increases after ERP installations. ERP implementation indeed stimulates integrated circuit firms to concentrate on innovation activities. Also, the DEA results show that firm efficiency significantly increases after the third year subsequent to ERP implementations. The Tobit regression results further prove that the curtailing of receivable turnover days and inventory turnover days are attributed to efficiency elevation through ERP installations.

Keywords: Enterprise resource planning; ANOVA; Turnover days; Patent; DEA (search for similar items in EconPapers)
JEL-codes: L25 M15 M41 O31 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:jda:journl:vol.49:year:2015:issue1:pp:285-304

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