ASSESSMENT OF INDUSTRIAL INVESTMENT PROJECTS USING DATA ENVELOPMENT ANALYSIS (DEA): CASE STUDY IRAN

Abstract

In the framework of the evaluation of investment projects of the United Nations Industrial
Development Organization, a lack of comprehensive approach in financial and economic
indicators can be observed. In this study, the application of data envelopment analysis to
determine the efficiency of an investment project is investigated. Statistical sample includes
60 projects out of 155 investment project investigated by Member companies of Fars
Province Association of Credit Counseling Services. Fourteen input data and two output data
selected to calculate the investment indicators based on UNIDO models. Then these data used
in different patterns of data envelopment analysis. Comparison of statistical correlation
results showed that the performance of the Non-Radial input-oriented model in addition has a
higher spearman correlation with UNIDO method results (Sig<0.05). Among the investigated
industry groups, the highest average efficiency was related to electricity and electronics
group followed by food and pharmaceutical industries. The lowest average efficiency was
also related to textile and cellulose industries. The important point in this model is accessible
reliable data in an appropriate number of existing projects. This limitation for the investor can
be considered a risk as a strong point for investment advisors, banks and investors that are
using this model by having actual data on a large number of projects and plans.