Changes in efficiency and physical size of container ports: An integration of genetic matching and stochastic data envelopment analysis

Abstract

Benchmarking container ports of different physical sizes and figuring out the relationship between size and efficiency is complex due to the heterogeneous environment. In dealing with heterogeneity, the selection bias is often overlooked. Therefore, this study proposes an integrated multivariate genetic matching and stochastic DEA algorithm to evaluate the efficiency of container ports. It paves the way for container ports that differ in a selected feature, such as size, to be benchmarked using well-balanced clusters. Thus, the port managers can identify the most similar-featured peers in benchmarking with DEA or alternative models to acquire robust estimates without dependence on a longitudinal data set. The results of the model applied to international container ports imply the increase in size impacts efficiency negatively, while connectivity does positively, which contradicts the commonly held perception of stakeholders that the larger the container ports, the more efficient. That is, well-managed small container ports can also be as efficient. Therefore, it is concluded that the results of integrating genetic matching into the performance measurement provide beneficial inferences. In future research, clustering the observed container ports according to a specific feature and balancing clusters with multivariate genetic matching can provide valuable insights into the industry.