Economic Efficiency of Forest Enterprises-Empirical Study Based on Data Envelopment Analysis

Countries are forced to develop bio-based economic strategies to promote efficient use of renewable natural resources. The transition towards a sustainable forest bio-based economy is associated with resource efficiency optimization, adoption of innovative bio-based approaches in terms of technological improvements and cost effectiveness, and an opportunity to reach multiple societal challenges. This paper is focused on a comparative analysis of the forestry sector in the Republic of Bulgaria and the Slovak Republic by estimating the economic efficiency of four Bulgarian state-owned forest enterprises and four Slovak forest enterprises. The evaluation of economic efficiency was carried out using selected indicators of the studied enterprises over a period of five years. A data envelopment analysis (DEA) approach was used as a non-parametric linear technique for measuring the relative efficiency of a set of production decision-making units (DMUs). The Malmquist productivity index (MPI) was used to assess the pure efficiency changes (PEC) and technological changes (TCs) of the studied forest enterprises. Data for 2014-2018 were processed. The results obtained for the economic efficiency study outlined the major factors affecting the differences in efficiency scores. The long-term sustainability and increased economic efficiency of forest enterprises in both countries can be achieved by improvements in forest management and investments in research and development activities.