Is profitability a good proxy for efficiency? Evidence from the subsector of tour operators

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F71226401%3A_____%2F17%3AN0008402" target="_blank" >RIV/71226401:_____/17:N0008402 - isvavai.cz</a>

Result on the web

<a href="http://nho.econ.muni.cz/17-2017/4-2017/profitability-good-proxy-efficiency-evidence-subsector-tour-operators" target="_blank" >http://nho.econ.muni.cz/17-2017/4-2017/profitability-good-proxy-efficiency-evidence-subsector-tour-operators</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.1515/revecp-2017-0022" target="_blank" >10.1515/revecp-2017-0022</a>

Result language

angličtina

Original language name

Is profitability a good proxy for efficiency? Evidence from the subsector of tour operators

Original language description

The goal of the paper is to evaluate the economic efficiency of tour operators in the Czech Republic in the period 2007-2014 using data envelopment analysis (DEA) models and prove the link between economic efficiency and profitability and to find out if profitability is a good proxy for economic efficiency. Data was exported from the database Albertina CZ Gold Edition. We calculated the efficiency score using CCR (Charnes, Cooper and Rhodes) and BCC (Banker, Charnes and Cooper) models based on 3 inputs and 1 output. In the years 2007 to 2010, the efficiency score of almost all the companies was higher than 0.5; however, in years since 2011, we revealed significant differences in the efficiency of individual firms and only about 40 percent of tour operators achieved an efficiency score higher than 0.5. Using Pearson and Spearman correlation coefficients, our findings show that, in the case of the Czech tour operator market, profitability ratios do not correspond with firm efficiency. Profitability ratios are not a good proxy for economic efficiency and should not be used as the only firm criterion of performance.

Czech name

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Czech description

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Type

J_SC - Article in a specialist periodical, which is included in the SCOPUS database

CEP classification

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OECD FORD branch

50204 - Business and management

Project

—

Continuities

V - Vyzkumna aktivita podporovana z jinych verejnych zdroju

Publication year

2017

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Review of Economic Perspectives

ISSN

1213-2446

e-ISSN

1804-1663

Volume of the periodical

17

Issue of the periodical within the volume

4

Country of publishing house

CZ - CZECH REPUBLIC

Number of pages

21

Pages from-to

425-440

UT code for WoS article

000419010200005

EID of the result in the Scopus database

2-s2.0-85045855126