Assessment of EU12 countries’ efficiency using malmquist productivity index

The paper deals with an application of Data Envelopment Analysis (DEA) method in an efficiency analysis of the “new” European Union (EU) Member States (EU12) during reference period 2000 – 2011, resp. in years of growth period 2000-2007 and in years of crisis and post-crisis period 2008-2011. DEA method becomes a suitable tool for setting an effective/ineffective position of each country, because measures numerical grades of efficiency of economical processes within evaluated countries. When applying DEA method, indicators of the Country Competitiveness Index (CCI) are used. Indicators included in CCI are interrelated; therefore correlation is used for assessment of internal relations between indicators and for reduction of their high number to a smaller number of variables, but at a minimum loss of information contained in the original variables. The main aim of the paper is to measure efficiency changes over the references periods and to analyse a level of productivity in individual countries based on the Malmquist Productivity Index, and then to classify EU12 countries according to efficiency results. The theoretical part of the paper is devoted to the fundamental basis of efficiency theory and DEA method – especially the Malmquist Productivity Index. The empirical part is aimed at measuring the degree of productivity and level of efficiency changes of evaluated countries by the Malmquist Productivity Index, measuring the change of technical efficiency and the movement of the production possibility frontier in reference period. The final part of the paper offers a comprehensive comparison of results obtained by calculating the Malmquist Productivity Index