The study of efficiency and productivity in Taiwan motherboard industry

Taiwan motherboard industry has the most market share in the world. However, due to the saturation of the market, the standardization of the products and the competition within the industry, every manufacturer is eager to seek the way to reduce cost and improve efficiency. Therefore, the relative efficiency and the productivity change of manufacturers are the important topics to research. This study collects the panel data of 11 Taiwan motherboard manufacturers from 1999 to 2005. First, we use Data Envelopment Analysis (DEA) to measure the technical efficiency of each manufacturer, and then examine the difference in the technical efficiency among first-tier and second-tier makers by using Mann–Whitney test. Finally, we calculate productivity change of manufacturers by using the Malmquist productivity index. The empirical results reveal that most motherboard manufacturers show technical inefficiency. There is no significant difference in technical efficiency among different-size makers. The deterioration in productivity is from technical stagnancy.