TY - JOUR
T1 - Investigating prospective gains from mergers in the agricultural sector through Inverse DEA
AU - Oukil, Amar
N1 - Publisher Copyright:
© 2022 The Author(s). Published by Oxford University Press on behalf of the Institute of Mathematics and its Applications. All rights reserved.
PY - 2023/7/1
Y1 - 2023/7/1
N2 - This paper presents a new application of Inverse data envelopment analysis (InvDEA) for strategic decision making: mergers & acquisitions (M&A) in the agricultural sector. Given a set of agricultural farms, the decision maker is interested in estimating the potential gains that are likely to result from the merger of two or more farms, as well as the redistribution of inputs among the merging farms, for an efficiency target set a priori for the post-merger farm. Using a sample of greenhouse (GH) farms from the Batinah region (Oman), an InvDEA approach is applied to investigate pairwise consolidations among GH farms and determine the level of inputs required for a merger to achieve full efficiency. Moreover, a DEA-based approach is introduced for selecting the best partners of a merger based on pertaining potential gains. The results highlight the importance of mergers as a strategic option for an efficient management of resources in the agricultural sector, especially scarce resources, like water and electricity.
AB - This paper presents a new application of Inverse data envelopment analysis (InvDEA) for strategic decision making: mergers & acquisitions (M&A) in the agricultural sector. Given a set of agricultural farms, the decision maker is interested in estimating the potential gains that are likely to result from the merger of two or more farms, as well as the redistribution of inputs among the merging farms, for an efficiency target set a priori for the post-merger farm. Using a sample of greenhouse (GH) farms from the Batinah region (Oman), an InvDEA approach is applied to investigate pairwise consolidations among GH farms and determine the level of inputs required for a merger to achieve full efficiency. Moreover, a DEA-based approach is introduced for selecting the best partners of a merger based on pertaining potential gains. The results highlight the importance of mergers as a strategic option for an efficient management of resources in the agricultural sector, especially scarce resources, like water and electricity.
KW - Agriculture
KW - Data envelopment analysis (DEA)
KW - Greenhouse
KW - Inverse DEA
KW - Merger
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U2 - 10.1093/imaman/dpac004
DO - 10.1093/imaman/dpac004
M3 - Article
SN - 1471-678X
VL - 34
SP - 465
EP - 490
JO - IMA Journal of Management Mathematics
JF - IMA Journal of Management Mathematics
IS - 3
ER -