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Core business concentration vs. corporate diversification in the US electric utility industry: Synergy and deregulation effects

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  • Sueyoshi, Toshiyuki
  • Goto, Mika
  • Shang, Jennifer
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    Abstract

    Many economists such as Wilson (2002) [Wilson, R., 2002. Architecture of power market, Econometrica, 70, 1299-1340] have considered that there are similarities between electricity and gas services in the US electric utility industry. Hence, they expect a synergy effect between them. However, the two businesses do not have technology similarities at the level that the gas service produces a synergy effect with electricity. To examine whether there is a synergy effect of corporate diversification in the industry, we compare electricity-specialized firms with diversified utility firms in terms of their financial performance and corporate value. The comparison indicates that core business concentration is more effective for electric utility firms than corporate diversification under the current US deregulation policy.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 37 (2009)
    Issue (Month): 11 (November)
    Pages: 4583-4594

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    Handle: RePEc:eee:enepol:v:37:y:2009:i:11:p:4583-4594

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    Web page: http://www.elsevier.com/locate/enpol

    Related research

    Keywords: Electricity Synergy Deregulation;

    References

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    Citations

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    Cited by:
    1. Sueyoshi, Toshiyuki & Goto, Mika, 2012. "Efficiency-based rank assessment for electric power industry: A combined use of Data Envelopment Analysis (DEA) and DEA-Discriminant Analysis (DA)," Energy Economics, Elsevier, vol. 34(3), pages 634-644.
    2. Sueyoshi, Toshiyuki & Goto, Mika & Sugiyama, Manabu, 2013. "DEA window analysis for environmental assessment in a dynamic time shift: Performance assessment of U.S. coal-fired power plants," Energy Economics, Elsevier, vol. 40(C), pages 845-857.
    3. Sueyoshi, Toshiyuki & Goto, Mika, 2013. "Returns to scale vs. damages to scale in data envelopment analysis: An impact of U.S. clean air act on coal-fired power plants," Omega, Elsevier, vol. 41(2), pages 164-175.
    4. Sueyoshi, Toshiyuki & Goto, Mika & Ueno, Takahiro, 2010. "Performance analysis of US coal-fired power plants by measuring three DEA efficiencies," Energy Policy, Elsevier, vol. 38(4), pages 1675-1688, April.
    5. Sueyoshi, Toshiyuki & Goto, Mika, 2011. "Operational synergy in the US electric utility industry under an influence of deregulation policy: A linkage to financial performance and corporate value," Energy Policy, Elsevier, vol. 39(2), pages 699-713, February.
    6. Sueyoshi, Toshiyuki & Goto, Mika, 2013. "DEA environmental assessment in a time horizon: Malmquist index on fuel mix, electricity and CO2 of industrial nations," Energy Economics, Elsevier, vol. 40(C), pages 370-382.

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