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Firm growth in the Swedish energy sector: Will large firms become even more dominant?

Author

Listed:
  • Macuchova, Zuzana

    (Dalarna University)

  • Rudholm, Niklas

    (HUI Research)

  • Tang, Aili

    (Dalarna University)

Abstract

This paper examines the determinants of firm growth in the Swedish energy sector using a sample of 200 energy firms active from 2000 to 2010. The article has two aims. First, we want to investigate whether there is reason to believe that the Swedish energy market will become more concentrated in the future, dominated by just a few firms. That would be the result if, for example, large firms systematically and over time grew faster than did smaller firms in the Swedish market. Second, we want to investigate whether firm growth can mainly be explained by firm-specific variables, supporting Penrose’s (1959) suggestion that internal resources are the key determinants of firm growth rates. To this end, quantile regression is used in addition to ordinary least squares regression, to provide a more complete estimation of the growth distribution of firms conditional on different attributes. The results indicate that large firms do not grow faster than do other firms in the sector, and that energy firms’ internal resources are indeed the key determinants of firm growth in the Swedish energy industry.

Suggested Citation

  • Macuchova, Zuzana & Rudholm, Niklas & Tang, Aili, 2014. "Firm growth in the Swedish energy sector: Will large firms become even more dominant?," HUI Working Papers 104, HUI Research.
    • Handle: RePEc:hhs:huiwps:0104
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    References listed on IDEAS

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    More about this item

    Keywords

    Market power; energy market regulation; energy market competition; quantile regression; competition policy;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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