Evaluating the competitive market efficiency of top listed companies in Egypt

Abstract

Purpose

The purpose of the research presented in this paper is to measure the relative market efficiency of the top listed companies in Egypt.

Design/methodology/approach

Applying a two‐stage approach, this study uses production frontier analysis (PFA) to measure the relative market efficiency of 62 listed companies in Egypt, and Tobit regression to examine the dependence of efficiency on the specific operating environment of these companies.

Findings

The results indicate that the performance of several companies is sub‐optimal, suggesting the potential for significant improvements over both profitability and marketability dimensions. Separate benchmarks were derived for possible reductions in resources used, and the results indicate that several companies deploy a much larger number of employees than required by a best practice company, and significant savings are possible on this account.

Originality/value

From a policy perspective, this study highlights the economic importance of encouraging increased market efficiency throughout the business sector in Egypt.

Citation

Mostafa, M.M. (2007), "Evaluating the competitive market efficiency of top listed companies in Egypt", Journal of Economic Studies, Vol. 34 No. 5, pp. 430-452. https://doi.org/10.1108/01443580710823239