Evaluating the potential efficiency gains from optimal industry configuration: A case of life insurance industry of India

Biresh Sahoo () and Kaoru Tone

Managerial and Decision Economics, 2022, vol. 43, issue 8, 3996-4009

Abstract: Using data envelopment analysis, this paper presents a scheme to decompose industry efficiency into two components: learning efficiency and harmony efficiency. This decomposition scheme is empirically illustrated on 23 life insurance companies in India for 8 years (2011–2012–2018–2019). Our two broad empirical findings reveal that first, as per the year‐wise results, the Indian life insurance industry has the potential to increase its efficiency by 28% by improving its learning efficiency by 20% and harmony efficiency by 10%; and second, based on the results on the top 75 promising mergers, the potential gains stem from learning rather than harmony.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:43:y:2022:i:8:p:3996-4009

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