Abstract
China's power grid sector, which combines transmission and distribution, has grown rapidly after the restructuring reform in 2002. We evaluate the scale effect in the sector by employing a parametric Malmquist index based on a heteroscedastic true fixed-effects stochastic frontier model to estimate technical efficiency and total factor productivity for China's 30 grid companies from 2002 to 2017. The results show that there exists a scale effect. Most companies exhibit increasing returns to scale, total factor productivity experiences a significant growth driven by scale expansion. Companies with different scales should take differentiated actions to meet the challenges of market-oriented reform.
Original language | English |
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Article number | 101187 |
Journal | Utilities Policy |
Volume | 69 |
DOIs | |
Publication status | Published - Apr 2021 |
Bibliographical note
Funding Information:We appreciate the financial support from the National Natural Science Foundation of China (grant nos. 71874121 , 71671121 and 71431005 ), the support from National Key R&D Programme of China (grant no. 2018YFC0704400 ), and the support from Major Projects of the National Social Science Fund (grant no. 17ZDA065 ).
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