The Application of DEA to the Evaluation of Performance of Corporate Divestiture

Abstract

Corporate divestiture is the earliest method of contracting capital operation. With the development of capital market, the evaluation of performance of corporate divestiture is becoming more and more important. There are usually two methods to evaluate the performance of divestiture, that is event study approach and accounting index approach, but they both have some shortcomings. Based on the methodology of data envelopment analysis, this article provides a model to evaluate the divestiture performance based on stability index. The article also illustrates the selection of the input and output indexes and the calculation and treatment of data. The method presented in the article can provide comparative important information of the corporate divestiture.