Abstract

China's retail industry flourishes as its economy continues to grow rapidly. However, traditional Chinese retail firms are facing tremendous pressure, both from their international competitors operating in China and from the rise of the e-commerce industry. We study the efficiency of the Chinese retail firms in the domestic retail market. Specifically, we study seventeen publicly traded firms in China’s Retail Industry by taking a Data Envelopment Analysis (DEA) approach. Besides investigating the areas for improvement in efficiency, we also compare the performance of the firms against their performance in the stock market. We then present the discussions of the implications for investors in the stock market. One of our main contributions is that, we relate the performance in stock market with the DEA analysis, which sheds some light on the effectiveness of the DEA method.

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