The efficiency of SMEs in the global market: Measuring the Korean performance

We analyzed the technical efficiency, the productivity index and input resources utilization of supported small and medium-sized enterprises (SMEs) in Korea and indexed them using Data Envelopment Analysis (DEA) methodology. For these purposes, we measured the efficiency index of the fund-receiving enterprise by using the DEA model as the real data for input and output factors relating to an enterprise's production activity during 2000–2002.In this paper, we also made a comparison of the efficiency of enterprises located in the capital region and those located in non-capital regions so as to induce the political significance of regional perspective in the global era. Comparing the efficiency between the capital region and the non-capital regions is meaningful in order to analyze the benefits and disadvantages of the capital reallocation policy in Korea.We found that efficiency index of relatively large-sized enterprises to be high, and noticed an efficiency difference in the production of each region. Also, we compared the efficiency index by business and industry types. As a result of this study, we can conclude that the efficiency and proper distribution of equity in the political operation of Korea is desirable for the whole nation. Also, we found some policy implications, including: operation directions for government funds, the importance of increasing efficiency for small and medium-sized enterprises, etc.