Page No. 20 - 28: Benchmarking of Malaysian Shipping Companies using Stochastic Frontier Analysis approaches

Abstract

The purpose of this study is to benchmark selected shipping companies in Malaysia by evaluating their technical efficiency particularly for the financial year 2015-2016. The secondary data of the selected companies were retrieved from the database of Kuala Lumpur Stock Exchange. Based on a Stochastic Frontier Analysis model, the data was analyzed using Frontier 4.1 and STATA 13.0 software. It was found that Malaysian Shipping Companies were operating at average of 92 percent. The hypothesis testing reveals both Cobb-Douglas production frontier and Translog production frontier models are significant at 1%. There is a strong relationship between the variables.