Efficiency, Taxation, and Solvency Issues for SMEs: The Case of Greece, Italy, and Spain

This paper provides new insights into the efficiency of European firms using accounting and financial ratios. In particular, we discuss how the data envelopment analysis (DEA) method can be used with accounting and financial data to highlight the importance of firm profitability as a counterbalance to crisis-induced weakness in demand. We consider several DEA models for studying the technical, financial, and financing efficiency of firms, including a unique set of variables (inputs/outputs) for productivity analysis. Our results provide recommendations for financial managers and analysts dealing with European firms, especially from the southern parts of Europe, i.e., Greece, Italy, and Spain.