Efficiency - Profitability Mapping of Shipping and Marine Transportation Companies: Evidence from Indonesia

Abstract

In supporting the maritime economy as the backbone of Indonesian economy, shipping and marine transportation companies should increase their performances. This research aims to analyze efficiency-profitability mapping of Indonesian shipping and marine transportation companies using efficiency-profitability matrix. This research uses Return on Assets (ROA) as profitability proxy and Data Envelopment Analysis for the measurement of efficiency (overall technical efficiency, pure technical efficiency, and scale efficiency). The results of this research show that not all of the technically efficient shipping and marine transportation companies are scale efficient. This research also finds that not all of the companies that have high profitability are also having high efficiency. Some companies are efficient but still make less profit because they are in the dog quadrant. Some companies are included in the Sleeper quadrant and should improve their management. However, most of the companies are included in the Star quadrant, means that most of the companies have high efficiency and profitability. The results of this research show that it’s important for to the shipping and marine transportation companies to increase their efficiency in order to have higher profitability.

DOI: 10.5901/mjss.2015.v6n5s5p230