Efficiency measurement of Ontario's sawmills using bootstrap data envelopment analysis

Abstract

Abstract Sawmills in Ontario are an important forest products industry, contributing to the economic prosperity of the entire province. However, these sawmills have been facing extreme competitive pressures, impacting their operational efficiency. This study uses a nonparametric technique, the bootstrap data envelopment analysis, to analyse the relative efficiencies of 125 Ontario sawmills over a period of 17 years (1999 to 2015). The results indicate low levels of overall technical and managerial efficiencies in Ontario sawmills, which have been further impacted by economic downturns. Further analysis reveals that the size of the sawmills has had a statistically significant impact on their relative technical efficiencies. The main source of inefficiency was the management of operations, particularly when these sawmills were not able to adjust their inputs with changing and uncertain market demand conditions. These results provide policymakers and sawmill managers with comprehensive details so that future resources can be reallocated to improve the performance of the Ontario forest products industry.