Advances in Economics, Business and Management Research, volume 656

Proceedings of the 2022 2nd International Conference on Enterprise Management and Economic Development (ICEMED 2022)

Evaluation of Operating Efficiency of Small and

Medium Sized Technology Enterprises based on DEA
Model：A Case Study of Jiangsu Province
Ruoheng Hu1,*
1
Hong Kong Polytechnic University, Hong Kong, China
*
Corresponding author. Email: huodile14@gmail.com

ABSTRACT
In recent years, Jiangsu Province has introduced a series of support policies to help small and medium-sized technology
enterprises flourish, and also provide impetus for the economic development of Jiangsu Province. Using DEA model,
this paper provides a scientific evaluation of the operational efficiency of 10 Jiangsu small and medium sized technology
enterprises. The results show that: most of enterprises have significantly increased their operating efficiency, but the
growth rate of business operating efficiency has decreased and improving the scale efficiency is the key to improve the
enterprises operation efficiency.

Keywords: Operating Efficiency; Small and Medium Sized Technology Enterprises; DEA Model; Jiangsu
Province

1. INTRODUCTION enterprises; the total number of employees does not

exceed 500, annual sales revenue does not exceed 200
Small and medium sized technology enterprises have million yuan, total assets do not exceed 200 million yuan;
high technology content and strong innovation the products and services provided by the enterprise does
capabilities, they are the main body of innovation with not belong to the state regulations prohibitions,
great vitality and potential. They contribute more than 60% restrictions and elimination category; the enterprise in the
of GDP and are an important force in promoting previous year and the current year did not occur in a
economic development. Operational efficiency is an major safety, major safety, quality accidents and serious
indicator used to measure the operation of an enterprise. environmental violations, research and development; no
Efficient management contributes to improve operational quality accidents and serious environmental violations,
performance of the business and helps the business to scientific research serious breach of trust, and the
meet its short term liabilities effectively [1]. Therefore, enterprise is not listed in the business exception list and
this paper analysis that how small and medium sized the list of serious violations and breach of trust; the
technology enterprises attain an optimum level and enterprise according to the evaluation indicators of small
provide insights into the future development of such and medium-sized technology enterprises for
enterprises and policy implementation. comprehensive evaluation of the score of not less than 60
points, and the score of technology personnel indicators
2. LITERATURE REVIEW shall not be 0 points.
The emergence of small and medium-sized
2.1. Small and Medium Sized Technology technology enterprises is the product of the further
Enterprises introduction and implementation of science and
According to the "Evaluation Measures for Small and technology policies. In small and medium-sized
Medium Sized Technology Enterprises" in May 2017, a technology enterprises, technological innovation is the
small and medium sized technology enterprises must key to maintain good market performance and survival
meet the following conditions: registered in China and development of the enterprise, and is also its most
(excluding Hong Kong, Macao and Taiwan) resident important social responsibility.

Copyright © 2022 The Authors. Published by Atlantis Press International B.V.

This is an open access article distributed under the CC BY-NC 4.0 license -http://creativecommons.org/licenses/by-nc/4.0/. 530
 Advances in Economics, Business and Management Research, volume 656

2.2. Operating Efficiency input-output data for DMU technical efficiency [11]. The
equation is as follows:
In the context of deepening the investment system
^T
reform and transforming the development mode in China, min[   (e s   eT s  )]
various industries are paying more and more attention to
operational efficiency. Zheng Minggui et al. studied the
 n
  x j  j  s  x0

impact of private capital entry on the operating efficiency
of energy enterprises based on DEA-Tobit model [2]. Yi  jn1

  y j  j  s  y0
Xingfei studied the delisted enterprises of Anhui 
Province New Third Board to explore the changes of their  j 1
operational efficiency and successfully identified the  n
reasons for the linear decline of operational efficiency [3].   j 1
Wang Jiao et al. studied the efficiency of listed military  j 1

enterprises in China [4] . Wang Chia Nan et al. evaluated  j  0, j  1,2,..., n, 
and predicted the performance of listed real estate
In the above formula, suppose  ,  , s , s
* * * *
enterprises in Vietnam based on the data envelopment
analysis [5]. José F.M. Pessanha et al. propose a more represents the corresponding input and output of
DMU 0 in the optimal solution of BCC model. If  *  1 ,
robust approach to evaluate the regulatory operating
expenses of transmission firms, using several different
DEA models and then defining a global efficiency score s*  0 , s*  0 , the small and medium sized
based on the geometric mean of the DEA model [6].
Pablo Coto-Millán et al studied the impact of “cargo
technology enterprises are DEA valid; if only * 1,
* *
effect” on the technical efficiency and scale efficiency of but s  0 and (or) s  0 the medium sized
air transportation [7]. However, for small and medium technology enterprises is weakly DEA valid; and if any
of the conditions in   1 , s  0 and s  0 are
sized technology enterprises, most researchers mainly * * *
focus on the study of financing efficiency [8-9], but there not established, the small and medium sized technology
are few articles focus on the operational efficiency of enterprises are DEA invalid.
small and medium sized technology enterprises after
receiving financing and government support.
4. EMPIRICAL RESULTS AND
The uniqueness of this paper is to build an evaluation ANALYZATION
model based on DEA model to study the operating
efficiency of small and medium sized technology 4.1. Data Source and Variables
enterprises, and investigate the main factors affecting the
operating efficiency. As a large economic province, In order to evaluate the operation efficiency of small
Jiangsu Province cannot achieve the cultivation of new and medium sized technology enterprises in Jiangsu
dynamic energy and promote industrial transformation Province, after excluding the enterprises that do not
and upgrading without the healthy development of the disclose relevant data, this paper takes 10 listed Jiangsu
small and medium sized technology enterprises. small and medium sized technology enterprises as the
Therefore, the evaluation can not only provide insight research object, searches the company's annual reports
into the current enterprises operational efficiency, from 2018 to 2020, and obtains relevant data on the
speculate on the factors influencing the operational selected input and output indicators.
development of Jiangsu small and medium sized
Since the data of individual enterprises is negative,
technology enterprises, but also provide some reference
the obtained relevant indicator data is processed without
for the formulation of relevant industrial policies in
dimension, so that all indicator data are in the range of
Jiangsu.
[0.1,0]. On the one hand, this data processing method
satisfies the data requirements of the DEA model, on the
3. EVALUATION MODEL OF other hand, it does not change the meaning of the data
OPERATIONAL EFFICIENCY and the running results.
Based on the concept of relative efficiency, DEA In the past, scholars would choose different index
method is a non-parametric statistical method to evaluate systems according to the different evaluation subjects
the effectiveness of the same type of multi-input and and evaluation objectives when evaluating the
multi-output decision-making units. It is mainly divided operational efficiency of enterprises. Zou Qian et al. [12]
into CCR model and BCC model. According to the selected input indicators in the process of studying the
characteristics of BCC and CCR, this paper adopts the operating efficiency of petrochemical enterprises: main
BCC model “with variable returns to scale” proposed by business cost, net value of fixed assets and the number of
Banker et al. [10] and Charnest et al. to measure the initial personnel, and output indicators for the main business

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 Advances in Economics, Business and Management Research, volume 656

income. This paper is based on previous research and In terms of time change, the number of listed
combines the actual situation, constructs the operating companies that achieve effective operating in the
efficiency evaluation index system of small and medium technology industry is decreasing year by year. From the
sized technology enterprises, as shown in Table 1. perspective of a single listed company, all of them have
a high comprehensive technical efficiency of 0.8-1.
Table 1. Index System of Operating Efficiency
Huaxu Environmental, Jiayu Special Decoration, World
Evaluation of Small and Medium Sized Technology
Peace, and Little Cotton Jacket have a total
Enterprises
comprehensive technical efficiency of 1, it means they
Categories Specific variables
have reached the forefront of comprehensive technical
efficiency from 2018-2020. Qiaofa Technology, Insrude,
Non-current assets / million
He Ding Technology and Erikom are still not total
Input Indicators Technician/person comprehensive technical efficiency in these three years.
Number of employees/person Zhongyi Shares obtained lower comprehensive technical
Operating costs / million yuan efficiency from 2020 and Baokun New Material obtained
lower comprehensive technical efficiency from 2019.
Output Indicators Operating income / million yuan
Net profit / million According to the results of the DEA-BCC model, the
comprehensive performance, pure technical efficiency
Non-current assets are the short-term unrealizable or
and scale efficiency of 10 DMU in each year are
consumable assets of the enterprise; the number of
calculated, and the average values are calculated
technical personnel is the number of personnel engaged
respectively, as shown in Table 3.
in R&D work; the number of employees is the number of
all employees in the workforce, reflecting the size of the Table 3. Mean Annual Operating efficiency of 10
enterprise; the operating cost is the number of employees Listed Enterprises in Jiangsu Province
in the enterprise; the number of employees is the number
of all employees in the workforce, reflecting the scale of Comprehensive
Pure Technical
the enterprise; the operating cost is an indicator of capital Technical Scale
and other inputs in the business process; the output Year Efficiency
Efficiency Efficiency
indicators operating income reflects the enterprise
operating income before subtracting various costs; net
profit reflects the annual net profit of the enterprise, 2018 0.988 0.938 0.995
which is used to measure the annual operation of the 2019 0.994 0.983 0.939
enterprise.
2020 0.987 0.981 0.885

4.2. DEA Static Analysis Mean 0.990 0.967 0.940

It can be seen from Table 3 that the average
Using the DEA-BCC model, this paper analyzes the comprehensive technical efficiency remains between 0.9
sample data of 10 Jiangsu small and medium sized and 1. During 2018-2020, the average comprehensive
technology enterprises from 2018 to 2020, and obtains performance of enterprises shows a trend of first, rising
the operation evaluation results of technology listed and then, declining. In 2019, the value reaches the peak
companies, as shown in Table 2. and then begins to decline. This shows that the
Table 2. 2018-2020 Operating efficiency of 10 Listed comprehensive operating performance of Jiangsu small
Enterprises in Jiangsu Province and medium sized technology enterprises is generally
low, and the promotion is weak. The average value of
Firm Code 2018 2019 2020 pure technical efficiency is 0.967 and the average value
of scale efficiency is 0.940. These indicates that the
836908 0.892 0.938 0.901
overall technical efficiency is caused by improper
872129 0.968 0.955 0.939 technology management, insufficient resource allocation,
872941 0.987 0.985 0.936 and failure to achieve scale effects. As for the change in
tendency, comprehensive technical efficiency in 2018–
838165 1 1 0.951
2019 is increase, the reason is to reduce the pure technical
836329 1 0.949 0.952 efficiency, indicating that corporate management and
871664 1 1 1 resource configuration need to be improved. The reason
for the 2019-2020’s comprehensive technical efficiency
834440 0.978 0.939 0.982
decreases is a combination of reduced size and lower pure
836212 1 1 1 technical efficiency, indicating that the technology
873006 1 1 1 enterprises in this year did not developed well.
836935 1 1 1

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5. CONCLUSION [3] Yi Xingfei. Exploring the operational efficiency of

Anhui New Third Board delisted enterprises.
This paper uses a DEA model to measure the Modern Business. 2020 (26): 83-84.
innovation performance of 10 listed Jiangsu small and
medium sized technology enterprises from 2018 to 2020, [4] Wang Jiao, Li Na, Yu Xiaobing. Research on the
the conclusions are as follows: evaluation of operational efficiency of listed
military enterprises in China based on DEA model
(1) In the past three years, most of the small and [J].Evaluation study of operational efficiency.
medium sized technology enterprises have significantly Journal of Hulunbuir College, 2020, 28(04): 56-64.
increased their operating efficiency, but the growth rate
of business operating efficiency has decreased. [5] Wang ChiaNan, Nguyen ThiLy, Dang ThanhTuan.
Analyzing Operational Efficiency in Real Estate
(2) The main reason for the decrease of
Companies: An Application of GM (1,1) and DEA
comprehensive efficiency is the decrease of scale
Malmquist Model.Mathematics, 2021, 9(3): 202.
efficiency, so improving the scale efficiency is the key to
improve the enterprises operation efficiency. [6] José F.M. Pessanha, Albert C.G. Melo. Bench
marking the operating expenses of Brazilian
Based on the above conclusions, combined with the
transmission companies using the DEA model.
current development of Jiangsu small and medium sized
technology enterprises, the following suggestions are put Electric Power Systems Research, 2021,190:
forward: 106675.

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