A study on corporate operational sustainability of DHI companies in Bhutan: Using TFP approach

The aim of the article is to evaluate the corporate sustainability performance at operational level of eight homogeneous DHI companies of Bhutan over the period 2015 to 2018. An assessment of operational sustainability is essential for assessing and improving the productivity and performance of companies. Data envelopment analysis using Malmquist productivity index has been applied to measure the total factor productivity (TFP) and its components: pure technical efficiency, technological efficiency and scale efficiency. DHI companies are considered to transform their inputs (annual expenditure, number of employees and annual donations) into outputs (cost saving and profit). The model considered is the input-oriented Malmquist productivity index under the variable return to scale. Data were collected from the published annual reports of the companies. The overall productivity progressed in four companies. The overall changes in pure technical efficiency and scale efficiency have progressed with 11.6 percent and 7.2 percent, respectively. The overall technological efficiency change has regressed with 14.4 percent. Thus, the overall productivity growth in DHI companies are mainly attributed to technical improvements and not to technological advancements. The technological inefficiency was the main source of inefficiency in DHI companies.