Frontier analysis in measuring the efficiency of mass media companies

Abstract

This paper employs frontier analysis to measure the efficiency of written and visual media companies in Turkey. Three leading print media companies and nine TV companies are evaluated. Personnel costs, total assets and total equities of the companies are selected as input factors while total value added, total sales, and net profits are preferred as the output factors. Data is gathered from open sources and covers the period of 2007 - 2013. Three-year moving average approach is applied to the data to get more smooth values and a five-year average. Banxia Frontier Analyst software with mixed approach is used in evaluations. The average efficiency rates are found to be 98.4 % for print media companies (national newspapers and magazines), and 93.2 % for visual media companies (national broadcasting TVs). The overall average is about 94.5 %. Multivariate regression is also applied to the data in order to establish a basis for more effective utilization of the technical efficiency of the method. Furthermore, sensitivity analysis is carried out to better understand the relationships between input and output variables in the model. The paper is unique and brings contributions to the literature.