This paper investigates listed firm efficiency on Pakistan Stock Exchange by
using Data Envelopment Analysis (DEA). The reason for application and
calculation of the DEA score is to know how much the firms are efficient in
utilizing their resources to be converted into output (sales/Net Income). An
optimization technique (DEA) that helps calculate efficiencies of firm’s decision
making Units (DMU’s) by taking different inputs and outputs variables. This
paper uses DEA in measuring efficiency of 136 Pakistani firms listed on
Pakistan Stock Exchange (PSX). Using secondary data set of 136 firms for the
period 2008-2017, efficiency measurements are calculated by using financial
ratios and financial indicators as input and output variables. Results show that
some of the firms are efficient in utilizing their available resources in an efficient
way to convert it into output, while some are inconsistent in efficiently utilizing
their resources (inputs) to get the desired outputs.
1-Muhammad Nisar Khan PhD Scholar, Abdul Wali Khan University Mardan, Mardan, KP, Pakistan.2-Adnan Ahmad Assistant Professor, IBL, Abdul Wali Khan University Mardan, Mardan, KP, Pakistan.3-Noor Jehan Assistant Professor, Department of Economics, Abdul Wali Khan University Mardan, Mardan, KP, Pakistan.