This paper estimates the productivity evolution of the Brazilian electricity distribution industry decomposing it in terms of technical efficiency, scale-efficiency and technical change. This exercise aims to understand one important issue that has not been analyzed in previous papers, that is the impact of firm’s size in efficiency and productivity evolution. It employs stochastic frontier analysis on a panel of 18 Brazilian firms from 1998-2005. The results allow us to conclude that company size is an important issue in the evolution of the industry’s productivity and, therefore, a key aspect to consider when making decisions affecting the organization and composition of electricity distribution.
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Paper provided by FEDEA in its series Economic Reports with number
04-09.