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Expert Systems with Applications 38 (2011) 68566865

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Expert Systems with Applications


journal homepage: www.elsevier.com/locate/eswa

Building the measurement framework of technology efciency with technology development and management capability Evidence from the ASEAN countries
Shih-Chien Chien a,, Tai-Yue Wang b, Su-Li Lin a
a b

Department of International Business and Trade, Shu-Te University, Kaohsiung, Taiwan Department of Industrial and Information Management, National Cheng Kung University, Tainan, Taiwan

a r t i c l e

i n f o

a b s t r a c t
In this paper, we present a research framework with data envelopment analysis (DEA) approach to evaluate a nations technology efciency and effectiveness in ASEAN countries. The study proposes two outputs, patents and licenses (PL) and technology exports (TE) along with three inputs, information and communication technology (ICT), R&D (RD), and governance capability (GC) in the model. Building on evidence from our research, we found that country has better outcome in PL can be derived from better application in ICT which in terms of TE to RD and GC as well. Additional ndings also revealed the variable of ICT is mainly advantageous to technology efciency in ASEAN countries. Further, from the viewpoint of country, our results indicate both Singapore and the Philippines are the most efcient countries among the variables in technology efciency, scale efciency, and window analysis as well. Moreover, our ndings suggested some other countries may explore the suitable strategy to enhance their technology efciency with benchmarking countries. 2010 Elsevier Ltd. All rights reserved.

Keywords: Technology efciency Technology development Management capability DEA

1. Introduction The organization and structure of business processes in technological activities can be regarded as strategic tools to sustain the core competence of a nations economy. As Raymond (1997) noted that technology plays a critical ingredient in the economic development of countries. Thus, continual investment in technology to build dynamic capabilities is one of the three sources of successful competition in the 21st century (Zahra, 1999). Wang (1999) also pointed out that the application of information and communication technology (ICT) has revolutionized the structure of both management and competition in the emerging global economy. Findings of his research indicated the effect of technology application (i.e. high technology efciency) on economic growth can be achieved merely through strong national information infrastructure (i.e. technology development and management capability). Additionally, prior works dened the core competence as bundles of skills and technologies (Prahalad & Hamel, 1990), or pools of experience, knowledge, and systems that can be considered to create and accumulate new strategic assets (Markides & Williamson, 1994). These strategic assets, which are imperfectly imitable, constitute a nations competitive advantage. Therefore, following the above research, we have condence that effective technology development and management capability are the determinant
Corresponding author. Fax: +886 7 615 8000x3300.
E-mail addresses: cscsyh@stu.edu.tw, cscsyh@mail.stu.edu.tw (S.-C. Chien). 0957-4174/$ - see front matter 2010 Elsevier Ltd. All rights reserved. doi:10.1016/j.eswa.2010.12.051

factors to sustain core competence for nations. In addition, to sustain national competitiveness and create value in the network economy, a rich body of prior research shows that technological competence of a country is not only to be given precedence but needs to be developed network competence to link with other alliances (Ritter & Gemunden, 2004). While the former capabilities are based on the integration of technology; the latter should be managed under a system of global integration to allocate resources within strategic alliance. Consequently, the strategic application of this principle must emphasize both dynamic and capability within management system to achieve technology efciency (Schulz, 2001; Teece, 1998). According to Ulrich and Lake (1991) argue that competing from the inside out requires a continuous effort in building appropriate technological skills with sufcient management resources. In this respect, how to advance technology efciency by means of better technology development (e.g. improved information and communication technology, higher R&D expenditures, and more scientists and engineers in R&D) as well as management capabilities (e.g. higher education levels and a better socio-economic environment) are critical issues for researchers and authority of a nation. Moreover, a variety of factors may be included in the category of technology development, management development and technology efciency as well. With regard to the determinant factors of national competitiveness (Hmlinen, 2003), enterprise competitiveness with the diamond model (Porter, 1990), the double

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diamond model (Moon, Rugman, & Verbeke, 1995), the national innovation system (Dosi, Freeman, nelson, Silverberg, & Soete, 1988; Freeman, 1982; Lundvall, 1992; Nelson, 1993), technology competitiveness (Roessner, Porter, Newman, & Caufel, 1996), macro-economic competitiveness (Ulengin, Ulengin, & Onsel, 2002), and the competitive advantage factors of an enterprise (Li & Deng, 1999), there are several notable research institutions and researchers have proposed evaluation models and frameworks to measure competitiveness for specic issues, such as world competitiveness yearbook the International Institute for Management Development (IMD); the global competitiveness report World Economic Forum (WEF). According to the prior research models and frameworks, various factors are explored that related to the interrelationships among technology development, management capability, and technology efciency in developed countries, respectively. However, few studies focus on these issues with regard to less-developed countries (Dahlman & Frischtak, 1993; Katz & Bercovice, 1993). Recently, National Cheng Kung University (NCKU) joined with the research in ASEAN countries and proposed a national competitiveness model in both developing and less-developed countries. Yet, it was still lack of ofcial published reports both in developed and developing countries and limited their analysis in this region (Wang, Chien, & Kao, 2007). Based on the past literature, technology development and management capability are the two factors that nations need to put more efforts in order to specialize in their technology efciency and stimulate economic growth. Linn, Zhang, and Li (2000) emphasized that technology should not only fulll the management needs of a specic set of technologies within a domain and interdomain relationship, but develop a better management capability. In other words, how to implement strategies with available social resources (education, health, and welfare), current technologies, future markets, and socio-economic environment to improve technology efciency is crucial for most nations. In addition, the synergy of technology development and management capability may sustain a nations economic growth, and consequently, it is not surprising that few developed countries have previously engaged in technology investment under effective management capability to achieve their economic growth. Unfortunately, there fails clear evaluation for technology efciency in relation to national resources (e.g. education, technology investment, R&D, nance, health, and welfare). One denition could be made of resources in the attainment of technological goals, taking technological and managerial factors into account. Still, another problem in evaluating the technology efciency of nations is lack of a good estimate of the production function (i.e. the functional relation between inputs and outputs) (Rousseau & Rousseau, 1997). To solve this problem, the relative technology efciency of units was introduced (Farrell, 1957). However, Link (1996) argued the production function approach has a number of signicant limitations which render its usefulness to an evaluation of government-sponsored research projects questionable (Farrell, 1957). Consequently, the measurement of technology efciency will be undertaken in this study by using the technique of data envelopment analysis (DEA) approach. DEA is an operations research-based method to measure the performance efciency of decision units that are characterized by multiple inputs and outputs. In addition, DEA converts multiple inputs and outputs of a decision unit into a single measure of performance, generally referred to as relative efciency. The research of Charnes, Cooper, and Rhodes (1978) was the rst to propose the DEA method as an evaluation tool for decision units. Since then, DEA has been applied successfully as a performance evaluation tool in many research elds, e.g. in studies of scientic wealth of European nations (Rousseau & Rousseau, 1997), hospital adminis-

tration, the organization of the US Navy Recruitment Command (Norman & Stoker, 1991), school districts, secondary education (Sherman, 1984), and universities (Degraeve, Lambrechts, & Van Puyenbroeck, 1996), respectively. In DEA the performance of each unit under study is compared with that of every other one. Units which perform best use their inputs more optimally than the others and the most optimal units form a frontier, called the efciency frontier. Less performing units need more input to produce the same amount of output and are therefore situated at some distance of the frontier. Units situated on the efciency frontier will have a relative performance rate of 1 (they are a 100% efcient), and the frontier is said to envelop all decision-making units (DMUs). In this study, we specically designed the DMU be the ASEAN countries. The organization of the study is organized as follows: in the section two, we present the research framework and data structure. Next, we describe the data sources and DEA. In the following sections, we provide the empirical studies of ASEAN countries, and the conclusions as well as suggestions are discussed in the nal section. 2. The research framework and data structure This section explains the construct of research framework and data structure. The categories of input and output include technology development, management capability and technology efciency as well. From the logic of this research design, the research framework and data structure are will be explained as follows. 2.1. Research framework From the theoretical viewpoint, DEA requires several input/output variables to measure the efciency of the closed system. The framework is derived from Wangs model (Wang, 1999) and combines a management capability category so as to examine the inuences of education investment and socio-economic support. The research framework includes three parts: technology development and management capability, technology efciency outcome, and

Input Domain

Technology Development
Output Domain

Technology Management Capability


DEA Domain

Efficiency

Efficiency Measurement Contribution Evaluation Feedback


Fig. 1. The research framework of technology efciency measurement.

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DEA measurement as well. Fig. 1 shows the basic conceptual structure and is explained as follows: 1. The input domain two categories of technology development and management capability are included in this domain. Each category is then divided into several factors. We contend the better technology development and management capability, the better technology efciency for ASEAN countries. 2. The output domain the achievement of technology is derived from the investment in technology development and management capability, and these results represent the efciencies of technology for ASEAN countries. 3. DEA domain the DEA is calculated by the optimization of the input and output weights for each DMU (i.e. each ASEAN country). The efcient and inefcient units are then distinguished by their relative input and output variables. In addition, the contribution of individual input and output variables can also be measured. 4. The evaluation information will feed back and rene the strategies of the input domain by examining the gap between inefcient and efcient units, we gure out the contribution of each sub-category of input and output. This evaluation information will then feed back to the original strategy, as well as offer a clear path using the niche variables of the input domain to promote technology efciency in related technological investment. 2.2. The data structure of technology development, management capability and technology efciency The source for the data used in this paper is mainly derived from prior studies and institutional research databases. We attempt to retrieve data from Asia Development Bank (ADB), Union National Development Program (UNDP), Central Intelligence Agency (CIA), and World Bank (WB) databases before dening

the items for each category. The rst input category of technology development deals with two sub-categories (namely information and communication technology, R&D), which are measured by the following indicators: (1) telephone mainlines (per 1000 people), (2) cellular subscribers (per 1000 people), (3) internet users (per 1000 people), (4) R&D expenditures (as % of GDP), and (5) scientists and engineers engaged in R&D (per million people). Next, the input category of management development deals with governance capability which is measured by three factors: (1) an education index, (2) a life expectancy index, and (3) a human poverty index. Whereas, the output category of technology efciency includes two sub-categories (namely patents and licenses and technology exports), which are measured by four factors: (1) patents granted to residents (per million people), (2) receipts of royalties and license fees (US$ per person), (3) registrations in the US Patent and Trademark Ofce, and (4) high technology exports (as % of manufactured exports). The detail denitions and references from research databases or literature for each item are listed in Table 1. 3. Data sources and DEA basics This section discusses the source of data, the scaling process, and the DEA basics. 3.1. Data sources In this paper, information and communication technology (ICT), R&D (RD), and governance capability (GC) are adopted as input sub-categories, while patents and licenses (PL) and technology exports (TE) are used as output sub-categories in this study. These indices are combined with several items. More specically, partial indices are combined into composite indices that represent the complex managerial achievements related to a specic issue (e.g.

Table 1 The list of items for each category. Category Technology development Sub-category Information and communication technology (ICT) Items Telephone mainlines (per 1000 people) References Wang (1999), Archibugi and Coco (2004), Chin (2005), WEF (2005), UNDP (2005) and WB (2005) Sources Central Intelligence Agency (CIA), Asian Development Bank (ADB), Union Nation Development Program (UNDP) (Human Development Report, HDR), World Bank (WB) CIA, ADB, UNDP (HDR), WB CIA, ADB, UNDP (HDR), WB CIA, ADB, UNDP (HDR), WB

Research and development (RD)

Cellular subscribers (per 1000 people) Internet users (per 1000 people) R&D expenditures (as % of GDP) Scientist and engineers in R&D (per million people) Education indexa Life expectancy indexb Human poverty indexc Patents granted to residents (per million people) Receipts of royalties and license fees (US$ per person) Registered in US Patent and Trademark Ofce High technology exports (as % of manufactured exports)

Management development

Governance capability (GC)

Technology efciency

Patents and licenses (PL)

Wang (1999), Chin (2005), Archibugi and Coco (2004), UNDP (2005) and WB (2005) Chin (2005), WEF (2005), Archibugi and Coco (2005) and UNDP (2005) Wang (1999), Wanger, Brahmakulam, Brian, Jackson, and Wong (2001) and UNDP (2005), WB (2005) Wang (1999), Wanger et al. (2001), UNDP (2005) and WB (2005) Wang (1999), Archibugi and Coco (2001) and UNDP (2005) UNDP (2005) UNDP (2005) UNDP (2005) Desai et al. (2002) and UNDP (2005)

CIA, ADB, UNDP (HDR), WB UNDP (HDR) UNDP (HDR) UNDP (HDR) UNDP (HDR) UNDP (HDR)

Technology exports (TE)


a b c

WEF (2005), Archibugi and Coco (2004) and Lall and Albaladejo (2001) Lall and Albaladejo (2001), Desai et al. (2002) and UNDP (2005)

US Patent and Trademark Ofce (UPTO) UNDP (HDR)

It is based on the adult literacy rate and the combined gross enrolment ratio for primary, secondary and tertiary schools. It measures the relative achievement of a country in life expectancy at birth. It is based on a long and healthy life, education and a decent standard of living.

S.-C. Chien et al. / Expert Systems with Applications 38 (2011) 68566865 Table 2 The scaling input/output data of SEA countries for the year 20012003. Country (year) Bru-2001 Cam-2001 Ind-2001 Lao-2001 Mal-2001 Mya-2001 Sin-2001 Tha-2001 Vie-2001 Phi-2001 Bru-2002 Cam-2002 Ind-2002 Lao-2002 Mal-2002 Mya-2002 Sin-2002 Tha-2002 Vie-2002 Phi-2002 Bru-2003 Cam-2003 Ind-2003 Lao-2003 Mal-2003 Mya-2003 Sin-2003 Tha-2003 Vie-2003 Phi-2003 ICT 5.04 1.05 1.46 1.06 5.53 1.04 10 2.53 1.36 2.05 4.77 1.11 1.65 1.1 3.66 1.03 10 3.1 1.48 2.23 2.1 1.19 1.74 1.11 5.77 1 10 3.7 1.68 2.17 PL 1.03 1 1.15 1 2.65 1 10 2.39 1.03 1.44 1 1 1.32 1 2.33 1 10 1.65 1.09 1.41 1 1 1.15 1 2.23 1 10 1.92 1.01 1.24 RD 0.01 0.01 1.12 0.01 1.19 2.5 10 5.5 1.22 1.18 0.01 0.01 1.13 0.01 1.65 0.01 10 1 1.45 1.19 0.01 0.01 0.01 0.01 2.13 0.01 10 1 0.01 0.01
a

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Table 3 The t statistics for two groups of SEA countries with different variables. GC 9.5 1.56 6.51 1.19 7.93 3.78 9.67 6.6 6.98 8.25 8.99 1.61 5.14 1.19 7.74 3.81 10 7.81 6.71 8.06 8.76 1.59 6.39 1.27 8.14 4.61 10 7.79 6.67 8.18 Index of subcategory Group 1 Mean 4.373 3.392 3.141 6.357 7.881 Standard deviation 3.184 3.453 3.764 3.555 1.357 Group 2 Mean 1.741 1.011 0.353 0.142 4.548 Standard deviation 1.32 0.024 0.755 0.348 3.138 2.957 2.671 2.813 6.738 3.775 0.006252a 0.0125a 0.009a 0a 0.0008a t Statistic p Value

TE 0.01 0.01 1 0.01 7.95 0.01 8.42 3.84 0.01 10 1 0.01 2.77 0.01 8.97 0.01 9.26 4.98 0.01 10 0.01 0.01 2.89 0.01 9.84 0.01 10 5.42 1 0.01

ICT PL RD TE GC
a

p Value < 0.05.

The output-based efciency of any DMU is computed as the minimum of a ratio of weighted inputs (Xik; i = 1, . . ., m; k = 1, . . ., n) to weighted outputs (Yrk; r = 1, . . ., s; k = 1, . . ., n) and the weights of all DMUs under consideration are less than or equal to 1. Thus, the minimum efciency g1 for DMU k (k = 1, . . ., n) is:

Pm 1 v i X ik Min Psi1 gk r 1 ur Y rk Pm v r1 i X ij subject to Ps P 1 for all j 1; . . . ; n r 1 ur Y rj

2 3 4

ur ; v i P e > 0 r 1; . . . ; s; i 1; . . . ; m

a Because the process of DEA cant have blank data, missing data is replaced with a small value.

the education, life expectancy index, and human poverty indices). The description of each composite index is described in Table 1. Each sub-category item is collected from a related database (e.g. the HDR from the UNDP (2003, 2004, 2005), the World Bank (2005) and the prior studies are described in Table 1). Due to the different ranges of items, the value of each item is standardized by the following equation before analysis:

The weighting coefcient vi is regarded as the weight of the ith input variable and ur is regarded as the weight of the rth output variable. In addition, the above formulation has s output variables, m input variables, and n DMUs. e represents a very small positive value. In practice, weights will be low when inputs and outputs are relatively low, while weights will be high when the relative of inputs and outputs are high. Theoretically, Eq. (4) corresponds with the requirement that the weights are positive. In addition, recent advances in DEA allow for the estimated weights to be constrained so that none input or output variable will dominate the efciency estimation. It is also possible to set minimum limits for the estimated weights so that all inputs and outputs are forced to play a role in efciency computation. Mathematically speaking, these just amount to additional constraints in the above optimization. 4. Empirical studies

Standardized value the value is from 1 to 10 data sample minimum=sample maximum sample minimum 9 1 1

The scaling data are standardized in Table 2. Each data is represented from the year 2001 to 2003 for 10 ASEAN countries. 3.2. DEA basics DEA is a linear programming based technique for measuring the relative performance of Decision Making Units (DMUs) where the presence of multiple inputs and outputs makes comparisons difcult. DEA provides a means of calculating apparent efciency levels within a group of DMUs. The efciency of a DMU is calculated relative to the groups observed best practice. In this respect, we have to optimize the performance of each DMU compared with the best performing units of the group. In doing so, we need to minimize the ratio of weighted inputs to weighted outputs subject to the condition that similar ratios for every DMU more than or equal to unity. The decision variables of this model are the weighting coefcients: one set for each unit. They are thus constructed that they yield the most protable result for the unit concerned. In contrast, regression estimates just one set of weights for all DMUs and produces one functional form relating inputs and outputs of all outlets under consideration. Admittedly, we may contend DEA is a reasonable method to evaluate the technology efciency and nd the most protable variables to each ASEAN country.

In this section, we discuss the stages of technological measurement of ASEAN countries, which includes grouping, correlating, comparing, and nding the most signicant variables of technology investment for them. Also, the inuences of size (scale efciency) and time series (window analysis) are discussed in this section. 4.1. Grouping the ASEAN countries by technology development and management capability We rst employ the hierarchical cluster analysis method to group countries with similar technology development and management capability. The rst group includes Singapore, Malaysia, Thailand, Indonesia, and the Philippines (dened as group 1), while Laos, Brunei, Cambodia, Myanmar, and Vietnam are included in second group (dened as group 2). Additionally, a t statistic is used to examine the means between the two groups for all sub-categories, and the results show that the means of all indices are signicantly different under p < 0.05 (listed in Table 3). 4.2. Correlating the input and output variables To evaluate technology efciency, the input and output variables should have close relationships before we analyze the data. Through the correlation analysis, ICT and RD have a high

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S.-C. Chien et al. / Expert Systems with Applications 38 (2011) 68566865 Table 4 The correlation between input and output variables. Correlation ICT RD GC PL 0.91 0.95 0.49 TE 0.68 0.6 0.61

correlation with PL, while ICT, RD and TE, GC and TE have a medium correlation which except GC has a low correlation with PL, even though its coefcient value is close to 0.5. Admittedly, the input and output variables have close relationships. Additionally, Singapore has the highest positive correlation between the input and output variables in this study. More detailed information is given in Table 4, and the scatter plots of pair variables (Figs. A1A6) are presented in Appendix A. 4.3. Comparing the technology efciency of ASEAN countries Table 5 shows all the analysis results for the ASEAN countries via three inputs and two outputs that the linear program was formulated and solved using the FRONTIER software with the CCR model and output-based efciency. The technology efciency and the reference set of each country are considered in three year time periods. Also, the rankings in the three years are derived from their efciency calculations. All 100% (n) efcient countries receive rank one, with the next country then receiving rank n + 1. In 2001, Singapore, Malaysia, and the Philippines (in group 1) as well as Brunei, Laos, and Cambodia (in group 2) are fully efcient. Thailand also scores high efciency, while Indonesia and Vietnam seem to be less efcient. In 2002, Singapore, Malaysia, and the Philippines (group 1) as well as Brunei, Laos, Cambodia, and Myanmar (group 2) are fully efcient. The following next year, in 2003, Singapore, Malaysia, the Philippines, and Indonesia (group 1) as well as Laos, and Myanmar (group 2) in 2003. In sum, the ndings reveal that Singapore, the Philippines (group 1), and Laos (group 2) have full technology efciency during the years of 20012003. Further, Table 5 indicates the information about the unit performance in comparison with its reference sets or peers. Reference sets are the 100% efcient units, against which each inefcient unit

is compared, and each inefcient unit will have one or more peers in its reference set. Taking group 1 countries for example, although it is efcient, Malaysia seldom appears in the reference sets, as it has a lower rank with regard to efcient units. In contrast, Singapore appears in every set for the three years, since it has a higher rank with regard to efcient units. In other hand, among the group 2 countries, Laos and Cambodia seldom appear in the reference sets, while Singapore, Indonesia and the Philippines (group 1), are frequently do for all three years. Overall, it is obvious that Singapore has more technology efciency than those of other ASEAN countries. Furthermore, we discuss the relative efciency among the ASEAN countries for the three years. The research results reveal that the rank correlation is 0.3950.875 for group 1 countries and 00.79 for group 2 countries, respectively. Further detailed analysis indicates the years 2001 and 2002 as well as 2002 and 2003 have similar positive correlations for group 1 and 2 countries. In contrast, the years 2001 and 2003 has less correlation for both groups of countries.

4.4. Finding the contribution of input/output variables for technology efciency in ASEAN countries Also, in this section, we further discuss the contribution of input/output variables to technology efciency (listed in Table 6). In other words, these results can identify the most protable variables for each country under the DEA analysis, which governments should put more efforts in order to leverage their resources so as to develop and maintain their technology efciency. In group 1 countries, Singapore, Thailand, and Indonesia (except year 2003) benet from ICT and have better outcome of PL. However, RD and GC are apparently not comparable with ICT, and may lead to worse outcome of TE. By contrast, Malaysia benets from GC and has better in TE. The phenomenon indicates that these countries may have different strategies and resources both in technology investment and government policy. In addition, Thailand and Indonesia have little change in 2003, and the outcome of PL beneted from ICT to RD. The Philippines mainly beneted from GC and has better TE in 2001 and 2002, somewhat there is a lack of ofcial data for TE in 2003, and thus we believe that the

Table 5 The relative efciency of technology for ASEAN countries for the years 20012003. Country Singapore Malaysia Thailand 2001 efciency 100 100 99.48 Reference set Rank 1 1 2 2002 efciency 100 100 68.67 Reference set Rank 1 1 4 2003 efciency 100 100 94.91 Reference set Rank 1 1 3

Singapore, The Philippines Singapore, The Philippines, Cambodia

Indonesia The Philippines Brunei Vietnam Laos Cambodia Myanmar Remark

80.7 100 100 76.11 100 100 96.15

4 1 1

90.63 100 100 73.69 100 100 100 vs. vs. vs. vs. vs. vs. 2002 2003 2003 2002 2003 2003 Rank Rank Rank Rank Rank Rank

Singapore, The Philippines, Myanmar, Laos Singapore, The Philippines, Myanmar

Singapore, Malaysia, Indonesia, Laos

2 1 1

100 100 81.59 88.69 100 98.9 100 p p p p p p value value value value value value 0.052 0.111 0.51 0.111 0.548 1

1 1 5 4 1 2 1

Singapore, Cambodia

5 1 1

Singapore, Myanmar

3 1 1 1

Indonesia, Singapore, The Philippines Indonesia, Myanmar, The Philippines Indonesia, Laos, The Philippines

Laos

Singapore

3 2001 2002 2001 2001 2002 2001

Group 1 nations

Group 2 nations

correlation correlation correlation correlation correlation correlation

0.875 0.79 0.395 0.79 0.363 0.0

S.-C. Chien et al. / Expert Systems with Applications 38 (2011) 68566865 Table 6 The contribution of input and output for SEA countries. Country (year) Input ICT Cambodia-2001 Cambodia-2002 Cambodia-2003 Brunei-2001 Brunei-2002 Brunei-2003 Laos-2001 Laos-2002 Laos-2003 Myanmar-2001 Myanmar-2002 Myanmar-2003 Vietnam-2001 Vietnam-2002 Vietnam-2003 Malysia-2001 Malysia-2002 Malysia-2003 Philippines-2001 Philippines-2002 Philippines-2003 Singapore-2001 Singapore-2002 Singapore-2003 Thailand-2001 Thailand-2002 Thailand-2003 Indonesia-2001 Indonesia-2002 Indonesia-2003 1 RD 99 100 95 96 6 65 GC Output PL 100 100 100 100 18 100 100 100 100 100 100 100 100 100 100 35 30 TE

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5 94 100 3 4 9 13

4 35 97

82

96 100 91 87 96 97 30

nations had better outcome of PL. However, the performance of the input and output variables of the group 2 countries are worse than group 1. Notably and unfortunately, Cambodia lacks published data for the RD and PL sub-categories. In this regard, the contributions of input and output have kind of bias existed. The last group 2 county Laos, which beneted from different inputs during these three years and has better in PL. Nevertheless, some group 2 nations have full relative efciency under DEA analysis which their physical achievement with regard to technology significantly lags the group 1 countries. Building on ndings from our observation, we found that countries have better application in ICT may foster better outcome in PL in terms of better RD and GC to better outcome in TE. 4.5. Regression analysis of DEA efciencies

4 3 70 11 15

89 85 100 100 100

65 70 100 100 100

36 100 88 87 100 88 53 92 93

64 10 10 6 12 8 7 81 2 3 6 35

19

100 100 100 100 89 77 43 95 84 98

11 23 57 5 16 2

Table 7 The results of multiple regressions. Variable Independent variable ICT Coefcient t-statistic p value Intercept R-squared Adjusted R-squared
*

The regression analysis was carried out to verify whether the efciency scores are inuenced by the ICT, RD, and GC. An ordinary least-squares (OLS) regression was performed for ICT, RD, and GC, as shown in Table 7, to determine their inuences on the technology efciency scores. Table 7 presents that the linear regression R-squared and adjusted R-squared are 0.267 and 0.182, respectively. The technology efciency is thus signicantly dependent on ICT and GC, even though RD is not a signicant variable for ASEAN countries. Also, we found that the ICT variable has the highest and most positive coefcient, and which can strongly inuence technology efciency. Further, from the research results, we believe that high technology efciency can lead to economic growth. Additionally, our results are also supported by prior studies which focused on the developed countries (Colecchia, 2002; Wang, 1999). Similarly, Colecchia (2002) pointed out the diffusion and usage of ICT play key roles in economic growth, and depend on the right framework conditions, instead of the existence of a large ICTproducing sector. 4.6. The measurement of scale efciency and window analysis for ASEAN countries In this study, the ASEAN countries are considered efcient, in terms of both CRS (constant returns to scale) and VRS (variable returns to scale). CRS is often regarded as productive efciency, while VRS is regarded as technical efciency. The scale efciency is the ratio of productive efciency to technical efciency. It has been shown that DEA efciency scores computed with the CRS assumption are less than or equal to the corresponding VRS efciency scores (Banker, Charnes, & Cooper, 1984; Charnes, Cooper, & Lewin, 1994), and thus, the scale efciency of a DMU operating in its most productive size is 1. In Table 8, we regard the three years data as an independent DMU as well as evaluate the technology efciency with CRS and

RD 1.04611 1.09598 0.283136

GC 2.03258 2.72543 0.011336*

3.19669 2.53085 0.017769* 99.67 0.267 0.182

Indicates the variable is signicant with technology efciency (p value < 0.05).

contribution of input/output variables may exist some bias in that year. However, in general, the Philippines outperforms than other group 1 countries for the outcome of TE. Together, the group 2 countries, Myanmar and Vietnam beneted from ICT as much as Brunei beneted from RD, and all three

Table 8 The scale efciency of ASEAN countries. Nation (year) 2001 CRS efciency Singapore Malaysia Thailand Indonesia The Philippines Brunei Vietnam Laos Cambodia Myanmar 1 0.9985 0.9855 0.793 1 0.8307 0.7574 1 1 0.9615 VRS efciency 1 1 1 0.8143 1 0.8307 0.7574 1 1 0.9745 Scale efciency 1 0.999 0.986 0.974 1 1 1 1 1 0.987 2002 CRS efciency 1 1 0.6569 0.8747 1 0.8314 0.7365 1 0.9888 0.9967 VRS efciency 1 1 0.8346 0.8949 1 0.8314 0.7365 100 0.9888 0.9967 Scale efciency 1 1 0.787 0.977 1 1 1 1 1 1 2003 CRS efciency 1 0.9967 0.7247 1 1 0.8159 0.8869 0.9973 0.9865 1 VRS efciency 1 0.9995 0.895 1 1 0.8159 0.8869 0.9973 0.9865 1 Scale efciency 1 0.998 0.81 1 1 1 1 1 1 1

6862 Table 9 The window analysis of DEA. Nation Brunei Cambodia Indonesia Lao Malaysia Myanmar The Philippines Singapore Thailand Vietnam Window W1 W2 W1 W2 W1 W2 W1 W2 W1 W2 W1 W2 W1 W2 W1 W2 W1 W2 W1 W2 2001 1 1

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2002 1 0.8314 0.9996 0.9958 0.8816 0.899 1 1 1 1 1 0.9988 1 1 1 1 0.6573 0.6862 0.7369 0.7365

2003 0.8159 0.9865 1 0.9977 0.9977 1 1 1 0.7247 0.8869

Mean 0.911825 0.995475 0.89535 0.999425 0.99905 0.990075 1 1 0.764525 0.78

Variation 0.0078 0.0000295 0.07087 0.00000099 0.00000098 0.0002724 0 0 0.0175 0.0039

Column range 0.1686 0.0038 0.0174 0 0 0.0012 0 0 0.0289 0.0004

Total range 0.1841 0.0135 0.1992 0.0023 0.0023 0.0385 0 0 0.3326 0.1504

0.8008 1 0.9985 0.9615 1 1 0.9899 0.7597

VRS. Also, the scale efciency is then represented as the potential growth in output-based efciency. As a result, Singapore and the Philippines are the most efcient countries, which sustain their efciency from 2001 to 2003. In contrast, Thailand has decreasing efciency in 2001 and 2003 and Indonesia and Vietnam have positive growth in 2001 and 2003. Our research ndings provide evidence that the CRS efciencies are lower than the corresponding VRS efciencies. For example, the CRS and VRS efciencies in 2002 for Thailand are 65.69 and 83.46, respectively. It suggests that Thailand does not operate at the best possible scale size. Further, in Table 8, Thailands scale efciency is 0.787 (<1), and its current size of operations reduces pure technical (VRS) efciency by 0.213. Also, the similar situations are occurred in Indonesia, Malaysia, and Myanmar. In this section, we discuss the technology efciency via the window analysis methodology, which was introduced by Charnes, Cooper, Lewin, Morey, and Rousseau (1985). The methodology may improve the performance under a few DMUs and evaluate the time variation in specic time periods. Each window includes two years of data, and thus we have twenty DMUs in this research

design (see Table 9). In terms of efciency, Singapore and the Philippines are the most efcient (with means equal to 1) and also have the least variation (equal to 0). From the column range, all the countries have stable technology efciency from 2001 to 2003, except Brunei. In addition, Thailand, Indonesia, Vietnam, and Brunei have the worst performance in technology efciency, based on the total range (i.e. the difference between the best and worst efciency from 2001 to 2003). 5. Conclusions and suggestions In this study, we aim to employ DEA analysis to assess and examine the efciency and effectiveness of a nations technology efciency with the ASEAN countries. Notably, our research reveals there exist high correlations between inputs and outputs, and two groups of nations divided by input achievement with signicantly different mean under p < 0.05, compared with their relative efciency. Additionally, we make several advances in understanding that technology efciency construction in our research ndings. First, the better outcome of PL can be derived from better

Fig. A1. The correlation between ICT and PL.

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Fig. A2. The correlation between ICT and TE.

Fig. A3. The correlation between RD and PL.

Fig. A4. The correlation between RD and TE.

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Fig. A5. The correlation between GC and PL.

Fig. A6. The correlation between GC and TE.

application of ICT as well as TE to RD and GC. Second, the variable of ICT is the mainly protable factor for technology efciency to ASEAN countries. In particular, from the standpoint of country view, both Singapore and the Philippines are the most efciency countries among technology efciency, scale efciency as well as window analysis. However, although it is lack of ofcial published data in some countries, this study, as expected, makes great deal numbers of valuable contribution to the eld of technology efciency research to ASEAN countries. Third, our ndings also indicated there are some less-developed countries which have full technology efciency, and merely attain low ranking in comparison with the group 1 countries. In sum, in this paper we introduced and examined a model that use DEA analysis in technological evaluation studies along with suitable input and output variables that reect the physical technology efciency in ASEAN countries. Furthermore, our results present different measurements to evaluate the related indices as well as make comparisons with the countries studied. Finally and

not surprisingly, we acknowledge our study has potential limitations that must be kept in mind when evaluating these results. Firstly, it is a lack of ofcial published data for some less-developed countries. Secondly, we employ the dominant factors of technology development and management capability for the countries examined, instead of considering the factors of technology investment and evaluating the technology efciency. The main reason is that such less-developed countries should track the path of developed countries on the synergy of technology development and management capability so as to enhance their technology efciency. These inputs will offer more information to analysis and provide a robust framework measuring the technology efciency of ASEAN countries. Finally, there is still much to learn, and it is hoped that further research will explore some of the above issues in more detail. Appendix A See Figs. A1A6.

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