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

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.

A review of network DEA models based on slacks‐based measure: Evolution of literature, applications, and further research direction

“…As a benchmarking tool, it becomes possible to analyze best practices and information about the targets used in the evaluation of inefficient DMUs, where the targets are the coordinates of the efficient projection point on the frontier that would allow the inefficient DMU to become efficient. Targets, therefore, play an important role as they can identify key elements that can improve the performance of inefficient DMUs (Aparício et al., 2020). Furthermore, in recent years, SBM network models have been proposed and applied in several areas.…”

A composite indicator index as a proxy for measuring the quality of water supply as perceived by users for urban water services

“…These methods include the analytic hierarchy process (Molinos-Senante et al, 2014;Sun et al, 2020), TOPSIS (Fu et al, 2020), multi-criteria analysis (El Gibari et al, 2018;Mao et al, 2019;Pérez et al, 2019;Cabello et al, 2020), and methods derived from any of these approaches, such as MRP-WSCI, which is based on multi-criteria analysis (Ruiz et al, 2020) and data envelopment analysis (DEA). More specifically, DEA has been used to create CIs for evaluation in different sectors: services in airports (Baltazar et al, 2014), suppliers' green performance (Dobos and Vörösmarty, 2014), tourism (Gómez-Vega and Picazo-Tadeo, 2019), and corporate social responsibility (Staessens et al, 2019;Aparicio et al, 2020).…”

“…CIs have been applied to different areas to assess corporate social responsibility (Dočekalová and Kocmanová, 2016;Staessens et al, 2019;Aparicio et al, 2020), measure the sustainability or competitiveness of tourism (Gómez-Vega and Picazo-Tadeo, 2019;Lozano-Oyola et al, 2019;Cabello et al, 2020), and evaluate the management of public administration services (Lo Storto, 2016;D'Inverno et al, 2018;D'Inverno and De Witte, 2020), public health (Martín-Martínez et al, 2019;Fu et al, 2020;Murtas et al, 2020), and education (Murias et al, 2008;El Gibari et al, 2018).…”

A novel IFN-CSM-CoCoSo approach for multiple-attribute group decision-making with intuitionistic fuzzy sets: An application in assessing corporate social responsibility performance

“…It emphasizes the attention to human value in the production process and the contribution made to the customers and society. As a result, people began to pay attention to the social responsibility of companies in various fields [ [5] , [6] , [7] ]. In terms of CSR performance, according to earlier research in the West, it has been established that the true purpose of performance evaluation is to inspect, supervise, and conduct enterprises [ 8 , 9 ].…”