Evaluation of Efficiency and Ranking of Active Brokers in Tehran Stock Exchange

The present study aims at the evaluation of efficiency and ranking of active brokers in Tehran Stock Exchange using Data Envelopment Analysis approach. In doing so, the study has used the data regarding the ranking of 87 active brokerage companies in Tehran Stock Exchange directed in the year 2011 by Securities and Exchange Organization to measure the efficiency of brokerage companies using DEA-master software. Applying this model, the expected efficiency of each of the brokers was calculated, and also brokerage firms, i.e. brokers that according to their input sources have a proper output, were also identified. Moreover, effective brokers were ranked using weighted counting method in both input-oriented and output-oriented forms. The results showed that the brokers that acquired top ranks in the Securities and Exchange organization ranking do not necessarily operate efficiently based on the DEA method. In other words, some low-ranked brokers in the ranking of the Exchange Organization have performed more efficiently comparing to the higher ranked brokers.