Evaluation on the Efficiency of LED Energy Enterprises in China by Employing the DEA Model

Abstract

As an essential part of strategic emerging industry, the light emitting diode (LED) industry plays an important role in the development of a national economy as well as being a technology that is pivotal to energy saving and environmental protection. Due to the late start of China’s LED energy industry, there are few related studies, especially on the efficiency of China’s LED energy enterprises. The data envelopment analysis (DEA) method is widely used in efficiency measurement for its significant advantages in simplifying calculations and processing multiple input–output indicators. This study selected 34 Chinese LED energy enterprises, sorted out the various input and output indicators of each enterprise from 2017 to 2019, and calculated the technical efficiency, pure technical efficiency, and scale efficiency of each enterprise based on the CCR and BCC models of the DEA method. The result shows that, from 2017 to 2019, the overall technical efficiency of China’s LED energy enterprises continued to improve and that this was due to the LED energy enterprises’ emphasis on technology development. However, in terms of production scale, there is still a big gap between each enterprise and the optimal scale. On the one hand, studying the technical efficiency of China’s LED energy enterprises can measure whether an enterprise has reached the optimal input–output ratio; on the other hand, it can provide references for related stakeholders such as investment entities, regulatory agencies, and policy-making departments.