Estimating technical efficiency for global e-tailing companies for different regions

Only a few attempts have so far been made to examine the technical efficiency of e-tailing companies. This study estimates the technical efficiency in production of e-tailing companies in the American, European and Asian regions under heterogeneous technologies by applying metafrontier analysis to unbalanced panel data for 47 e-tailing companies during the period 2000-2008. The results show that the technical efficiency exhibits partial discrepancies when both traditional stochastic frontier analysis and metafrontier analysis are used. The average technical efficiency of e-tailing companies in the American region is found to be higher than that in the European region, which is in turn higher than that in the Asian region. However, when using metafrontier analysis, the technical efficiency of the e-tailing companies in the American region is found to be higher than that in the Asian region, which is in turn higher than that in the European region. Thus, we consider it to be a fallacy to suppose that the technical technologies used in the operations of e-tailing companies in the American, European, and Asian regions are identical.