The Technical Efficiency Change of Cooperative Stores in Thailand

Abstract

This study aims to verify factors determining the level of technical inefficiency of cooperative stores in Thailand from 2017–2021. The balanced panel data of 86 cooperative stores and the stochastic frontier analysis approach were employed to serve the objective. The results indicated the existence of inefficiency among cooperative stores in Thailand. By applying the Translog production function, the estimated technical efficiency scores for most decision-making units had an upward trend during 2017–2018 but slightly decreased during 2018–2020, i.e., the beginning of the COVID-19 pandemic, and finally began to rise again from 2021 after most people had been vaccinated and COVID-19 became endemic. Finally, the significant negative relationships between technical inefficiency and debt-to-equity ratio, reserves, and the location dummy variable suggest that to improve efficiency, cooperative stores should efficiently utilize their debts, maintain the appropriate number of reserves, and exercise the appropriate marketing strategies.