Abstract: Since it is originally proposed, Data envelopment analysis (DEA) has been broadly applied because of its various advantages in evaluating the relative effectiveness of decision-making units. However, it has a significant limitation, i.e. the requirement of the same properties of inputs and outputs. In order to overcome this shortcoming, this paper applies parametric approaches to DEA so as to take the external environmental factors into account. It constructes a new three-stage semiparametric model, with the main feature of the effective processing of environmental variables and nondiscretionary ones. Then, it further applies the new model to the subsidiaries of a domestic oil corporation, and succeedes in testifying its practicability and effectiveness.

Key words: environmental variables, three-stage DEA, production efficiency of oil companies