Effectiveness of management and managerial efficiency

In this paper, a nonparametric framework is developed to yields measures of managerial efficiency with matching cross-sectional data of successive periods. The major advantages of the proposed approach are that (i) there is no any assumption about production function imposed; (ii) the conventional input-output data can be used to evaluated the management level for base and current period according to the definition of effectiveness of management in this research; (iii) the managerial efficiency for current period is a measure with the effect of original management level removed by conducting data envelopment analysis; (iv) this measurement is supported strongly by a theory which is closely related to production economics. Applications of this proposed methodology using Chinese state industry in 2002 yields results that broadly confirm with expectations.