Evaluating the Efficiency of the Financial Performance of Algerian Economic Institutions Using Data Envelope Analysis (DEA)

Abstract

The objective of this study is to attempt to assess the efficiency of the financial performance of Algerian oil companies by measuring the relative efficiency for a sample composed of 8 oil institutions in Algeria during the study period (2010-2016) where we applied the Data Development Analysis (DEA) method with its two models :constant returns and variable returns with input orientation (CCR-I), and the study variables were :6 inputs (assets, value added, production, investor capital, employee expenses, operating costs) and 6 outputs reflect some of the traditional and modern financial performance indicators (rate of return on assets, rate of return on equity, sales rate of return, market value added, economic value added, investments returns), in order to achieve the results of the study, we relied in our research on the SIADV.3.0 and 25SPSS programs, and the results of the study showed that one oil company achieved full efficiency and 7 oil institutions did not achieve efficiency due to the existence of unused resources (defects), that is, untapped capacities.Therefore, the improvements needed to reduce inputs and increase outputs of inefficient institutions must be introduced.