Determining The Efficiency-Oriented Critical Drivers For E-Market Using Data Envelopment Analysis

This paper identifies the efficiency-oriented critical drivers for e-market using a two-stage approach. The efficiency of twenty-six e-markets is investigated first with respect to their respective overall efficiency, technical efficiency and scale efficiency, leading to the identification of the fully efficient emarkets and the underlying source of inefficiency in the existing e-markets. The efficiency-oriented critical drivers for e-market are then investigated using Tobit regression analysis based on the outcome of the analysis in the first stage, resulted in the identification of five critical efficiency-based drivers including head office location, coverage, revenue model, mechanism and language. The study shows that the source of inefficiency in the e-market is due to the scale of production. It further reveals that an e-market is more efficient if it (a) is US based, (b) focuses on offering the products or services internationally, (c) adopts a single type of revenue model, (d) focuses on an auction transaction mechanism and (e) provides a single language service. The findings of this study help existing e-markets improve their efficiency by focusing on the efficiency-based critical drivers and provide new players in e-market with guideline for developing efficient e-markets.