The effects of corporate governance on airline performance: Production and marketing efficiency perspectives

Wen Min Lu, Wei Kang Wang, Shiu Wan Hung, En Tzu Lu

Research output: Contribution to journalArticlepeer-review

81 Scopus citations

Abstract

This study explores the relationship between operating performance and corporate governance in 30 airline companies operating in the US. First, this study applies a two-stage Data Envelopment Analysis (DEA) to evaluate the production efficiency and marketing efficiency of the airlines. Our findings indicate that, in general, there is not as much dispersion in the relative productive efficiencies of the airlines as there is in their marketing efficiencies. The low-cost airlines, on average, are more efficient carriers than the full-service ones, but less efficient marketers. Secondly, truncated regression is used to explore whether the characteristics of corporate governance affect airline performance. The results demonstrate that corporate governance influences firm performance significantly. Finally, we address the managerial decision-making matrix and make suggestions to help airline managers improve performance.

Original languageEnglish
Pages (from-to)529-544
Number of pages16
JournalTransportation Research Part E: Logistics and Transportation Review
Volume48
Issue number2
DOIs
StatePublished - Mar 2012

Keywords

  • Corporate governance
  • Managerial decision-making matrix
  • Truncated regression
  • Two-stage Data Envelopment Analysis (DEA)

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