Efficiency measurement in public sugar refineries: DEA-Malmquist TFV application

High competition that is experienced in every field of economic system together with globalization fact requires productive and efficient use of scarce resources owned by public sector and private sector companies. In this context, public sector companies are obliged to form performance management, measure and evaluate the efficiency of their activities by means of Public Financial Management and Control Law No: 5018.In this study, relative efficiency measurement is done for 25 sugar refineries that are owned by Turkish Sugar Refineries Corporation by using Data Envelopment Analysis (DEA). Furthermore, in order to see the changes in efficiency of the refineries within time for the period of 2002-2009, changes in total factor productivity of refineries are examined by using Malmquist Total Factor Productivity Index (MTFPI).According to the results of input-orientated DEA models, 12 refineries are efficient under the assumption of constant returns to scale while 16 of them are efficient under assumption of variable returns to scale. As the results of MTFPI application, 0.6% growth in total factor productivity is observed and found that this growth is sourced from the technical progress and efficiency increase (respectively by 0.5% and 0.1%).Key Words: Sugar Refineries, Efficiency Measurement, Data Envelopment Analysis, Malmquist Total Factor Productivity