dea.merge: Estimate potential merger gains and their decompositions

In Benchmarking: Benchmark and Frontier Analysis Using DEA and SFA

Estimate potential merger gains and their decompositions

Description

Calculate and decompose potential gains from mergers of similar firms (horizontal integration).

Usage

dea.merge(X, Y, M, RTS = "vrs", ORIENTATION = "in",
          XREF = NULL, YREF = NULL, FRONT.IDX = NULL, TRANSPOSE=FALSE,
          CONTROL=NULL)

Arguments

X	K times m matrix as in dea
Y	K times n matrix as in dea
M	Kg times K matrix where each row defines a merger by the firms (columns) included in the matrix as returned from method make.merge
RTS	as in dea
ORIENTATION	as in dea
XREF	as in dea
YREF	as in dea
FRONT.IDX	as in dea
TRANSPOSE	as in dea
CONTROL	Possible controls to lpSolveAPI, see the documentation for that package. For examples of use see the function dea.

Details

The K firms are merged into Kg new, merged firms.

Most of the arguments correspond to the arguments in dea, with K firms, m inputs, and n outputs.

The decomposition is summarized on page 275 and in table 9.1 page 276 in Bogetoft and Otto (2011) and is based on Bogetoft and Wang (2005)

Value

Eff	Overall efficiencies of mergers, Kg vector
Estar	Adjusted overall efficiencies of mergers after the removal of individual learning, Kg vector
learning	Learning effects, Kg vector
harmony	Harmony (scope) effects, Kg vector
size	Size (scale) effects, Kg vector

Author(s)

Peter Bogetoft and Lars Otto [e-mail]

References

Bogetoft and Otto; Benchmarking with DEA, SFA, and R; chapter 9; Springer 2011.

Bogetoft and Wang; “Estimating the Potential Gains from Mergers”; Journal of Productivity Ana-lysis, 23, pp. 145-171, 2005.

See Also

dea and make.merge

Examples

x <- matrix(c(100,200,300,500),ncol=1,dimnames=list(LETTERS[1:4],"x"))
y <- matrix(c(75,100,300,400),ncol=1,dimnames=list(LETTERS[1:4], "y"))

dea.plot.frontier(x,y,RTS="vrs",txt=LETTERS[1:length(x)],
    xlim=c(0,1000),ylim=c(0,1000) )
dea.plot.frontier(x,y,RTS="drs", add=TRUE, lty="dashed", lwd=2)
dea.plot.frontier(x,y,RTS="crs", add=TRUE, lty="dotted")

dea(x,y,RTS="crs")
M <- make.merge(list(c(1,2), c(3,4)), X=x)
xmer <- M %*% x
ymer <- M %*% y
points(xmer,ymer,pch=8)
text(xmer,ymer,labels=c("A+B","C+D"),pos=4)
dea.merge(x,y,M, RTS="vrs")
dea.merge(x,y,M, RTS="crs")

Benchmarking documentation built on Nov. 10, 2022, 5:56 p.m.