Firm Efficiency in Tehran Stock Exchange

The aim of this study is to analyze the relative efficiency of 166 firms listed in “Tehran Stock Exchange” for the period of 1381-90.It is important to achieve efficiency scores that could be used as a benchmark for valuing firms that are active at the same time in both product and financial markets.This study uses a stochastic frontier approach (SFA) to estimate firm efficiency then sorted them based on efficient and inefficient firms.The resulting sorted scores show that the number of inefficient firms have increased and no change in the number of efficient firms between 1381 and 1390.In addition,only 21 percent of firms in this sample are efficient and the others are inefficient or non- efficient. The other result implied that the firms in industries group of vehicle and parts manufacturing,metal products,manufacture of non-metallic and sugar,are inefficient in one side,and firms in industries group of basic metals, multidisciplinary, cement and paper products industry are efficient,in other side.