Technical efficiency of car manufacturers under environmental and sustainability pressures: A Data Envelopment Analysis approach

Silvia Stefanoni, Augusto Voltes-Dorta

Research output: Contribution to journalArticlepeer-review

Abstract

Managers in the competitive automotive sector face growing pressures in terms of sustainability and environmental performance. While most efficiency studies focus on traditional financial and operating indicators, this study broadens the scope of analysis to include Environmental, Social, and Governance (ESG) activities. The well-known Data Envelopment Analysis (DEA) method is employed to estimate the technical efficiency of 33 global automakers from 2014 to 2017, including their ESG scores as outputs in the model. Our findings show that ESG-adjusted efficiencies tend to be higher than the traditional ones, with the Governance adjusted model achieving the highest efficiency scores, followed by the Environmental and the Social models.The results of a second-stage bootstrapped truncated regression reveal the significant impact of the automakers’size, degree of innovation and geographical region on the ESG-adjusted efficiencies. Finally, this study has implications for managers in the industry, as well as investors interested in creating sustainable portfolios.
Original languageEnglish
Article number127589
Number of pages11
JournalJournal of Cleaner Production
Volume311
Early online date24 May 2021
DOIs
Publication statusPublished - 15 Aug 2021

Keywords

  • automotive industry
  • technical efficiency
  • sustainability
  • Data Envelopment Analysis
  • ESG performance

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