Volume 29, Issue 5, 2020
DOI: 10.24205/03276716.2020.1013
Bootstrapped Total Factor Productivity Analysis of International Tourist Hotels in Taiwan
Abstract
The Malmquist productivity index (MPI), proposed by Fare et al. (1994) and based on the data envelopment analysis (DEA), is commonly used to measure total factor productivity (TFP). Being a linear-programming-based measure and lack of statistical nature, MPI may give incomplete information about TFP and its components and thus, guides incorrect policy and/or managerial implications. This study uses the bootstrapping approach, proposed by Simar and Wilson (1998, 1999) which takes into account the time-dependence structure of the data, to generate the appropriate bootstrap samples for analyzing productivity changes of Taiwan’s International Tourist Hotels (ITHs). The dataset, obtained from the annual Operating Report of International Tourist Hotel in Taiwan published by the Taiwan Tourism Bureau during 2010-2015, consists of 67 ITHs and 402 observations. Empirical results indicate that it is apparent to overstating the situation of changes in efficiency of Taiwan’s ITHs, and even worse in the case of changes in technology.
Keywords
DEA, total factor productivity, Malmquist indices, quasi-fixed inputs, bootstrap methods