A study of the relationship between competitiveness and technological innovation capability based on DEA models

Researchers and managers have been searching for appropriate methods to explore the relationship between technological innovation capability and competitiveness in recent years. This study attempts to find a systematic quantitative methodology to tackle this problem. In a recent survey covering 182 industrial innovative firms in China, the traditional data envelopment analysis (DEA) model was employed to analyze the data collected. The research results show that only 16% of the enterprises operate on the best-practice frontier and there are some inconsistencies between organizational innovation capability and competitiveness in many enterprises. Decreasing returns to scale were found among about 70% of the inefficient enterprises and increasing returns to scale were found among the remaining 30% of the inefficient enterprises. Thus the internal innovation harmonizing process in these enterprises is considerably inefficient. Based on the restricted ranges of the input/output factors, a multi-objective DEA projection model has also been developed in this study to provide a benchmark for auditing competitiveness. Research results further indicate that there is still much room for enterprises to improve competitiveness in situations of confining score ranges of technological innovation capability and competitiveness.