Dynamic DEA with network structure: A slacks-based measure approach

• We propose a dynamic DEA model with network structure within the framework of SBM.
• This model can evaluate the overall efficiency over the entire period.
• This model can evaluate dynamic change of period and divisional efficiencies.

We propose a dynamic DEA model involving network structure in each period within the framework of a slacks-based measure approach. We have previously published the network SBM (NSBM) and the dynamic SBM (DSBM) models separately. Hence, this article is a composite of these two models. Vertically, we deal with multiple divisions connected by links of network structure within each period and, horizontally, we combine the network structure by means of carry-over activities between two succeeding periods. This model can evaluate (1) the overall efficiency over the entire observed period, (2) dynamic change of period efficiency and (3) dynamic change of divisional efficiency. The model can be implemented in input-, output- or non-(both) oriented forms under the CRS or VRS assumptions on the production possibility set. Finally, we applied this model to a dataset of US electric utilities and compared the result with that of DSBM.