Performance assessment of major global cities by DEA and Malmquist index analysis

Global cities play an important role in economic and sustainable development of the world. Assessment of their performance is critical for understanding their position in globalization and provides useful information to policymakers, urban planners and general public. In this paper we assess the performance of 40 major global cities during 2012-2018. The assessment utilizes data from the Global Power City Index (GPCI) and involves the cities' performance in six dimensions, including Economy, R&D, Cultural Interaction, Livability, Environment, and Accessibility. Using the data envelopment analysis (DEA) approach, this paper takes all six dimensions into account to generate a unified measure of the cities' performance by benchmarking them against the efficiency frontier. Then we derive the Malmquist indexes to investigate the evolution of global cities' performance from 2012 to 2018, and decompose them to trace the cause of performance change to change of individual city and/or group-wide frontier shift effect. We find that one quarter of the cities are able to achieve perfect efficiency in transforming resources into outputs, including three cities from developing countries: Beijing, Cairo and Mumbai. Among all the global cities under study, Southern Europe cities (Barcelona, Madrid and Milan) display the worst efficiency levels, although they have greatly improved their performance during 2012-2018. Overall, 20% of the cities maintain a status quo between 2012 and 2018, 40% of the cities improve their performance, and 40% experience efficiency loss. Sao Paulo, Moscow and Istanbul have experienced the biggest efficiency loss in 2012-2018, and the loss can be attributed to different reasons.