A Comparative Application of Alternative DEA Models in Selecting Efficient Large Cap Market Securities in India

This paper empirically examines the different variants of data envelopment analysis (DEA) models to select the large cap market securities in India in both constant and variable returns to scale environments. The results of this exercise are summarized as follows. First, there is a fall in average efficiency score across models from Do (x,y) to SBMo (x,y) to SBM (x,y), but accompanied by a rise in coefficient of variation in both types of returns to scale environments, thus suggesting a wider range of variation in efficiency scores in SBM (x,y). Second, the top and bottom 19 companies are found from the diversified industries, and the optimization from this small efficient set becomes more readily acceptable. Third, the large computer software companies, though being very well known for their growth, did not appear in the list of top performers. This might be due to the sharp appreciation of rupee that has put this industry down because a bulk of their major business contract comes from abroad