TWO-STAGE EFFICIENCY MEASUREMENT AND TECHNOLOGICAL HETEROGENEITY: EVIDENCE FROM THE BIOTECHNOLOGICAL INDUSTRY IN TAIWAN

Yung-Hsiang Lu (), Yung-Ho Chiu, Ching-Ren Chiu and Yu-Chiao Hung ()
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Yung-Hsiang Lu: Department of Bio-industry and Agribusiness Administration, National Chiayi University, No. 580, Sinmin Road, Chiayi City, 600, Taiwan
Yu-Chiao Hung: Department of Bio-industry and Agribusiness Administration, National Chiayi University, No. 580, Sinmin Road, Chiayi City, 600, Taiwan

Asia-Pacific Journal of Operational Research (APJOR), 2014, vol. 31, issue 01, 1-19

Abstract: This paper explores the operational and market efficiencies of various biotechnological company formats in Taiwan during the period 2006 to 2008 by adopting the two-stage directional distance function and the meta-frontier concept. It conducts an efficiency assessment by taking into account a five-year time lag between R&D investments and actually obtaining a patent in order to better reflect the actual business operating process and thus more accurately gauge the efficiency of business operations in biotechnological companies. The empirical results show that non-listed companies registered better operational efficiency in the first stage, whereas their market efficiency in the second stage is inferior to that of listed companies when the meta-technology set is used as a basis. The average operation gap ratio and market gap ratio of non-listed companies exceeded those of listed firms, indicating that the technological heterogeneity (i.e., the gap) of non-listed companies is smaller than that of listed ones.

Keywords: Biotechnology industry; two-stage directional distance function; meta-frontier; technological heterogeneity (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1142/S0217595914500079

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