Efficiency of Japanese Local Broadcasters

Terrestrial broadcasters have a vertically integrated structure consisting of two different activities: program production and transmission. In addition, each local broadcaster provides services under different environmental conditions, such as the geography of the service area. Taking the functional structure of broadcasters and heterogeneity across broadcasters into consideration, this article measures the organizational and sectional efficiencies using a network <italic>data envelopment analysis</italic> (DEA) model that incorporates these environmental factors. The results clearly reveal differences in the performance of broadcasters compared with the results obtained from ordinary DEA.