Efficiency Evaluation of Sustainable Trade of Asia-Pacific Region Countries Using Data Envelopment Analysis

Abstract

Purpose – Sustainable trade is a holistic approach that considers economic, environmental, and social factors for the stability of the global economy. The aim of this study is to evaluate the sustainable trade efficiency of 24 countries in the Asia-Pacific region.
Design/methodology/approach – As a result of the literature review, three input variables (Real GDP Growth Per Capita, Gini Index, and CO2 Emissions Per Capita) and three output variables (Sustainable Trade Index Economic Component Score, Sustainable Trade Index Social Component Score, and Sustainable Trade Index Environmental Component Score) were determined. The sustainable trade efficiency of the selected countries was evaluated using the Input-Oriented Data Envelopment Analysis model under the assumption of variable returns to scale.
Findings – Seventeen countries in the Asia-Pacific region (the United Kingdom, Australia, South Korea, Japan, Canada, Chile, the Philippines, Vietnam, Thailand, China, Indonesia, Sri Lanka, India, Laos, Bangladesh, Pakistan, and Myanmar) were found to have a pure technical efficiency score of 1, indicating relative efficiency. However, the remaining seven countries in the Asia-Pacific region (the United States, Malaysia, Mexico, Peru, Ecuador, Papua New Guinea, and Russia) were found to be inefficient.
Discussion – The Reference Sets were defined, and Improvement Suggestions were presented so that inefficient Asia-Pacific Region countries can become efficient. Thailand, the Philippines, and the United Kingdom have appeared three times each in these reference sets. Myanmar, Pakistan, Laos, China, and Australia have not appeared in any Reference Set.