Employing a hierarchical data envelopment analysis to evaluate the competitiveness of listed companies in Indonesia

Enterprise competitiveness is a pivotal concept in business and economic studies, serving as a key factor in a company's capacity to achieve sustainable growth, sustain market relevance, and create value within a competitive environment. In this study, we employ fifteen indicators spanning financial, production, and marketing functions to measure competitiveness. Given that the enterprise competitiveness index is synthesized from the hierarchical nature of these indicators, we utilize hierarchical data envelopment analysis (HDEA) to endogenously determine weights, enabling the aggregation of indicators to derive a comprehensive competitiveness index. This approach allows businesses to understand their competitive position better and identify specific areas for improvement. By analyzing data from 951 Indonesian listed companies, we illustrate the practical application of this index, enabling businesses to identify areas for strategic improvement.