Measurement of efficiency in the construction industry and its relationship with working capital

Authors

  • J. Córdova Universidad del Azuay (Ecuador)
  • C. Alberto Universidad Nacional de Córdoba (Argentina)

DOI:

https://doi.org/10.4067/S0718-50732018000100069

Keywords:

Data envelopment analysis, working capital, construction, efficiency, financial indices

Abstract

This investigation seeks to determine the relationship between working capital as a financial measure and the efficiency level of construction companies. The study sample is intentional, with 58 participating companies, from which the financial information was obtained in a time horizon of four years (2011-2014). In the first stage efficiency was assessed using Data Envelopment Analysis (DEA), and in the second stage Tobit regression model was applied in order to identify the relationship between the variables. Efficiency levels evaluated show a reduction in the average efficiency in the construction sector for the years 2012 and 2013, and the regression results do highlight a positive link between efficiency and working capital for all years, which indicates that a common financial strategy based on reducing working capital does not lead to an increase in the efficiency level of construction firms. This research can benefit not only Ecuadorian construction companies, but others who wish to improve their competitive advantage based on their financial information.

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Author Biographies

J. Córdova, Universidad del Azuay (Ecuador)

Universidad del Azuay, Ecuador

C. Alberto, Universidad Nacional de Córdoba (Argentina)

Universidad Nacional de Córdoba, Córdoba. ARGENTINA

Published

2018-04-30

How to Cite

Córdova, J., & Alberto, C. (2018). Measurement of efficiency in the construction industry and its relationship with working capital. Revista Ingeniería De Construcción, 33(1), 69–82. https://doi.org/10.4067/S0718-50732018000100069

Issue

Section

Original Research