Analyzing efficiency of IP-intensive industries: the case of Korea

Abstract

This study aims to measure the efficiency of Korean industries and compare the efficiency between IP-intensive industries and non-IP-intensive industries in Korea using Propensity Score Matching (PSM) and Data Envelopment Analysis (DEA). To select appropriate Decision Making Units, we use PSM prior to applying DEA. We first measure the extent of the efficiency of IP- and non-IP-intensive industries and then check whether there are statistical differences between them applying Mann-Whiteny U test. As a result, it reveals that the IP-intensive industries show relatively higher efficiency than the non-IP-intensive industries. According to the result, we suggest that Korea government has to establish relative strategies that make full use of high-efficiency of IP-intensive industries to strengthen the national competitiveness.