A Well-Defined Composite Indicator: An Application to Corporate Social Responsibility

Abstract

Abstract This paper introduces a model to construct composite indicators for performance evaluation of decision making units, which is based upon the determination of the least distance from each assessed unit to a frontier estimated by data envelopment analysis. This generates less demanding targets from a benchmarking point of view. The model also makes it possible to account for the existence of slacks in all the considered dimensions (sub-indicators), playing with the notion of Pareto efficiency. Additionally, our approach satisfies units invariance, translation invariance and strong monotonicity and ensures that the weights used for the aggregation of the sub-indicators are always strictly positive. All previous approaches based on data envelopment analysis have failed to satisfy at least one of these properties. We also implement a new version of the Russell output measure of technical efficiency working with full-dimensional efficient facets. Finally, the new approach is illustrated by an application to the sphere of corporate social responsibility, showing the main empirical implications of the theoretical properties.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 31 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.