earticle

영어

This study investigates the technical, allocative, and overall advertising efficiencies for 14 Korean pharmaceutical firms using panel data from 2007 to 2009 by employing DEA window analysis. There are four inputs : TV advertising expense, Radio advertising expense, newspaper advertising expense, magazine advertising expense. One output includes sales. This paper relates the use of aggregate advertising cost data to the estimation of allocative efficiency when the price information about the inputs is not available. The results show that the overall, technical, and allocative efficiencies are 27.71%, 73.14%, and 35.89% respectively. We find that the main source of inefficiency is allocative rather than technical. In addition, this study implies that Korean pharmaceutical firms had not fully realigned their advertising expenses in response to a changing advertising market.