An integrated Data Envelopment Analysis and generalized additive model for assessing managerial ability with application to the insurance industry

Managerial ability plays a vital role in the performance of business enterprises; however, such efforts are not directly observable. This study estimates managerial within insurance sector economy based on two data sets from different Asian countries. We estimate insurer-wise efficiency using Data Envelopment Analysis (DEA) and regress logarithm obtained technical set contextual variables influencing insurer performance. In next stage, we regression residuals (the difference between observed fitted values efficiency). Furthermore, use this measure as an independent variable for explaining return equity ordinary least squares general additive model (GAM) show relationship is highly significant. compare contrast average • envelopment analysis industry. A total 228 firm-year observations used over five-year period. Insurer-wise estimated to then log regressed variables. equity. significance regression.