Inefficiency countervailed DEA (IC‐DEA) method for assessing corporate environmental performance☆

Data envelopment analysis (DEA) is a method frequently used to evaluate relative firm performance. However, high values in a few indicators can lead to a company being regarded as ‘efficient’, despite valuing poorly in other essential indicators. The Inefficiency Countervailed DEA (IC‐DEA) method is thus developed. The method first defines an inefficient frontier using the proposed Reverse DEA (RDEA) model. An IC‐DEA value is then determined by summing both the DEA and RDEA values. The IC‐DEA method was applied to assess the environmental performance of major opto‐electronic companies in Taiwan, demonstrating its applicability.