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Firm size and productivity. Evidence from the electricity distribution industry in Brazil

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  • Tovar, Beatriz
  • Javier Ramos-Real, Francisco
  • de Almeida, Edmar Fagundes

Abstract

In this paper we apply Stochastic Frontier Analysis through a distance function to investigate the impact of firm size on productivity development in electricity distribution. We use a sample of seventeen Brazilian firms from 1998 to 2005 and decompose productivity into technical efficiency, scale efficiency and technical change. Moreover, a further step is to decompose the technical change measurement into several components. The results indicate that firm size is important for industry's productivity, and therefore a key aspect to consider when making decisions that affect the market structure in the electricity distribution industry.

Suggested Citation

  • Tovar, Beatriz & Javier Ramos-Real, Francisco & de Almeida, Edmar Fagundes, 2011. "Firm size and productivity. Evidence from the electricity distribution industry in Brazil," Energy Policy, Elsevier, vol. 39(2), pages 826-833, February.
  • Handle: RePEc:eee:enepol:v:39:y:2011:i:2:p:826-833
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    References listed on IDEAS

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    Cited by:

    1. Kellermann, Magnus A., 2015. "Total Factor Productivity Decomposition and Unobserved Heterogeneity in Stochastic Frontier Models," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 44(1), April.
    2. Rahmatallah Poudineh and Tooraj Jamasb, 2015. "A New Perspective: Investment and Efficiency under Incentive Regulation," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    3. Galán, Jorge E. & Pollitt, Michael G., 2014. "Inefficiency persistence and heterogeneity in Colombian electricity utilities," Energy Economics, Elsevier, vol. 46(C), pages 31-44.
    4. Ipatova, Irina, 2015. "The dynamics of total factor productivity and its components: Russian plastic production," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 38(2), pages 21-40.
    5. repec:eee:enepol:v:111:y:2017:i:c:p:41-51 is not listed on IDEAS
    6. repec:eee:touman:v:36:y:2013:i:c:p:650-657 is not listed on IDEAS
    7. Losekann, Luciano & Marrero, Gustavo A. & Ramos-Real, Francisco J. & de Almeida, Edmar Luiz Fagundes, 2013. "Efficient power generating portfolio in Brazil: Conciliating cost, emissions and risk," Energy Policy, Elsevier, vol. 62(C), pages 301-314.
    8. Daglish, Toby & de Braganca, Gabriel & Owen, Sally & Romano, Teresa, 2015. "Electricity Market Operation: Transitioning from a Free Market to a Single Buyer structure: An econometric analysis of the Brazilian case using a Two-State Markov Switching Model," Working Paper Series 4181, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    9. Geraldine Henningsen & Arne Henningsen & Sascha T. Schröder & Simon Bolwig, 2014. "The Development of Environmental Productivity: the Case of Danish Energy Plants," IFRO Working Paper 2014/04, University of Copenhagen, Department of Food and Resource Economics.
    10. Aquila, Giancarlo & Pamplona, Edson de Oliveira & Queiroz, Anderson Rodrigo de & Rotela Junior, Paulo & Fonseca, Marcelo Nunes, 2017. "An overview of incentive policies for the expansion of renewable energy generation in electricity power systems and the Brazilian experience," Renewable and Sustainable Energy Reviews, Elsevier, vol. 70(C), pages 1090-1098.
    11. Cheng, Xiaomei & Bjørndal, Endre & Bjørndal, Mette, 2015. "Optimal Scale in Different Environments – The Case of Norwegian Electricity Distribution Companies," Discussion Papers 2015/22, Norwegian School of Economics, Department of Business and Management Science.
    12. repec:eco:journ2:2017-03-02 is not listed on IDEAS
    13. repec:eee:ejores:v:263:y:2017:i:3:p:1078-1094 is not listed on IDEAS
    14. Subal Kumbhakar & Roar Amundsveen & Hilde Kvile & Gudbrand Lien, 2015. "Scale economies, technical change and efficiency in Norwegian electricity distribution, 1998–2010," Journal of Productivity Analysis, Springer, vol. 43(3), pages 295-305, June.
    15. Jorge E. Galán & Michael G. Pollitt, 2014. "Inefficiency persistence and heterogeneity in Colombian electricity distribution utilities," Cambridge Working Papers in Economics 1423, Faculty of Economics, University of Cambridge.
    16. Ipatova, Irina & Peresetsky, Аnatoly, 2013. "Technical efficiency of Russian plastic and rubber production firms," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 32(4), pages 71-92.
    17. Rahmatallah Poudineh & Tooraj Jamasb, 2013. "Investment and Efficiency under Incentive Regulation: The Case of the Norwegian Electricity Distribution Networks," Cambridge Working Papers in Economics 1310, Faculty of Economics, University of Cambridge.

    More about this item

    Keywords

    Brazil electricity distribution Firm size Productivity decomposition. L94;

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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