Technical Efficiency of ICT Companies in East and Southeast Asia for the period 2013-2017
Palti Marulitua Sitorus and Yandhy Yuliansyah
Faculty of Economics and Business, Telkom University
Jalan Gegerkalong Hilir No.47, Bandung 40251, Indonesia
Abstract
Information and Communication Technology Industry (ICT) is very important for the country and has become one of main factors in driving economic growth in various developed and developing countries. Along with technological developments and the level of competition in the ICT industry, efficiency is one of the important factors for companies to be able to survive and improve the competitiveness of companies. This study uses panel data and the Stochastic Frontier Analysis (SFA) method to analyse and compare the technical efficiency of 30 the most valuable brands ICT companies in the Southeast Asia and East Asia regions for the period 2013 to 2017. The model used in this study is the SFA Translog Production Function with 4 input variables (capital, labor, other input, and time) and 3 explanatory variables (firms size, firm age, and GDP per capita). The results of data processing using the Frontier 4.1 program indicate that the technical efficiency of 30 ICT companies from 9 countries in Southeast Asia and East Asia has increased with an average annual growth trend of 0.93%. Based on its location, companies operating in the East Asia region have higher average technical efficiency values compared to companies in the Southeast Asia region. Companies operating in Japan, China and the Philippines have the highest average value of technical efficiency of companies, while companies in Thailand, Malaysia and Indonesia have the lowest average value of technical efficiency.
Keywords: Technical Efficiency, Stochastic Frontier Analysis, Translog, ICT, Information and Communication Technology, Southeast Asia, East Asia
Topic: Strategic Management & Ecosystem Business