Efficiency Analysis of Major Container Ports in Asia: Using DEA and Shannon’s Entropy

Abstract

This paper attempts to evaluate performance (i.e. efficiency) of Asia’s container ports. Measurement of the port’s performance is critical to increase the competitiveness of maritime transport, ultimately leading to one nation’s competitive advantages over other countries. Data Envelopment Analysis (DEA), which is a non-parametric method widely used for assessing efficiency of units which have similar characteristics, was selected to analyse the data. Due to the limitations of the DEA method producing diverse results according to different models, and to the complexities of choosing a specific model among several DEA models, Shannon’s Entropy was also employed. By including Shannon’s Entropy, the efficiency results calculated from each model were integrated in order to rank the ports. The results in this study will provide port managers with valuable information in order to understand the current status of Asia’s container ports in terms of their efficiency.