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http://dx.doi.org/10.14400/JDC.2021.19.10.339

A Study on the Efficiency and Its Determinants in Korea's Service Sectors Using DEA  

Bae, Se-Young (Department of Finance, Konyang University)
Publication Information
Journal of Digital Convergence / v.19, no.10, 2021 , pp. 339-348 More about this Journal
Abstract
This paper aims to analyze the production efficiency in Korea's ten service sectors using DEA and its determinants utilizing a truncated-Tobit regression model and a censored-Tobit regression model in 2010-2019. This paper found: First, the Korean service sector's production efficiency in general has been significantly low and polarized. Especially, the inefficiency resulted from the scale inefficiency in the 'sewerage waste management industry.' Second, in the determinants analysis, the results show the positive effect of the investment and R&D expenses on technical efficiency, while FDI and lobbying expenses illustrate the negative impact. Moreover, it seems that the larger the industry, the higher the efficiency. Thus, the future Korean government's economic policy for the service sectors requires a mixed and integrated policy of the macroeconomic aspect such as active investment and R&D activities with microeconomic aspect including a convergence of FDI and human capital.
Keywords
Data Envelopment Analysis (DEA); service sector's production efficiency; truncated-Tobit regression model; censored-Tobit regression model; efficient minimum wage; integrated economic policy;
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