Market Value Chain Efficiency in Turkey : Application of DEA to the Pre- and Post-2001 Financial Crisis

This paper examines the market efficiency of Istanbul Stock Exchange (ISE) listed non-financial firms from 2000 through 2002. A four-stage data envelope analysis (DEA) is developed to measure the performance of firms before and after the 2001 financial crisis. At each stage, production, profititability, marketability and overall efficiencies are measured. The findings show that firms are more efficient at the profitability stage than at other stages. However, the 2001 financial crisis eroded profitability efficiency. Overall, ISE listed firms experienced diseconomies of scale so that many firms were not able to transform production into sales and therefore earnings efficiently, particularly during the crisis period