Analysis of Technical Efficiency in theJapanese Sawmill Industry usingNonparametric Approach

Abstract

The objective of this article is to analyze the technical efficiency of the sawmill industry by prefectures in Japan over the period of 1990-2006 using nonparametric approach, Data Envelopment Analysis. The data used in analysis are domestic roundwood purchased, foreign roundwood purchased, number of employees, and power capacity as inputs, and shipments of products for construction and others as outputs. Empirical results show that the Japanese sawmills have enjoyed highly technical and scale efficiency, averagely 0.958 and 0.988 respectively. The first post-hoc test with Kruskal-Wallis revealed that the average efficiency of sawnwood production decreased significantly with time. The second post-hoc test with Mann-Whitney showed that the average technical efficiency in different production scale varied significantly, however, the power capacity and wood species had no effects on technical efficiency.