Technical efficiency in electricity generation - the impact of smallness and isolation of island economies

Technical efficiency in electricity generation - the impact of smallness and isolation of island economie

The Use of Parametric and Non Parametric Frontier Methods to Measure the Productive Efficiency in the Industrial Sector. A Comparative Study

Parametric frontier models and non-parametric methods have monopolised the recent literature on productive efficiency measurement. Empirical applications have usually dealt with either one or the other group of techniques. This paper applies a range of both types of approaches to an industrial organisation setup. The joint use can improve the accuracy of both, although some methodological difficulties can arise. The robustness of different methods in ranking productive units allows us to make an comparative analysis of them. Empirical results concern productive and market demand structure, returns-to-scale, and productive inefficiency sources. The techniques are illustrated using data from the US electric power industry.Productive efficiency; parametric frontiers; DEA; industrial sector

Productivity Drivers in Japanese Seaports

This paper analyses efficiency drivers of a representative sample of Japanese seaports by means of the two-stage procedure proposed by Simar and Wilson (2007). In the first stage, the technical efficiency of seaports is estimated using several models of data envelopment analysis (DEA) that might be employed in order to establish which of them are most efficient. In the second stage, the Simar and Wilson (2007) procedure is used to bootstrap the DEA scores with a truncated bootstrapped regression to identify efficiency drivers. The policy implications of our findings are considered.Seaports; Japan; Data Envelopment Analysis; Truncated Bootstrapped Regression.

Efficiency Analysis of East European Electricity Distribution in Transition: Legacy of the Past?

This paper provides a cross-country efficiency analysis of electricity distribution companies in East European transition countries (Poland, Czech Republic, Slovakia and Hungary). We compare the relative technical efficiency of East European regional distribution companies (RDCs) among themselves, as well as with German RDCs. We use the nonparametric DEA, and also apply bootstrapping techniques and the FDH-estimator; in addition, we carry out parametric analyses, mainly SFA (stochastic frontier analysis) and COLS (corrected ordinary least squares). The results suggest that the Polish distribution companies are still inefficiently small. The Czech Republic and Slovakia feature the highest efficiency.Efficiency analysis, Econometric methods, Electricity distribution, Transition, Eastern Europe

Evaluating the Location Efficiency of Arabian and African Seaports Using Data Envelopment Analysis (DEA)

In this paper the efficiency and performance is evaluated for 22 seaports in the region of East Africa and the Middle East. The aim of our study is to compare seaports situated on the maritime trade road between the East and the West. These are considered as middledistance ports at which goods from Europe and Far East/Australia can be exchanged and transhipped to all countries in the Middle East and East Africa. All these seaports are regional coasters, and dhow trade was built on these locations, leading this part of the world to become an important trade centre. Data was collected for 6 years (2000-2005) and a non-parametric linear programming method, DEA (Data Envelopment Analysis) is applied. The ultimate goal of our study is: 1) to estimate the performance levels of the ports under consideration. This will help in proposing solutions for better performance and developing future plans. 2) to select optimum transhipment locations.Middle East and East African Seaports; Data Envelopment Analysis; Seaports Efficiency; Performance measurement of Containers Ports; transshipment.

Are Our Export-Oriented Industries Technically More Efficient?

This paper makes a comparison of technical efficiency scores between groups of exporting and non-exporting industries. Using data from Census of Manufacturing Industries in Pakistan (2005-06), technical efficiency scores of 102 large scale manufacturing industries are estimated. Stochastic Frontier Analysis as well as Data Envelopment Analysis technique are used to estimate technical efficiency scores. In Stochastic Frontier Analysis Translog and Cobb-Douglass Production Functions are specified, whereas in Data Envelopment Analysis technique, efficiency scores are computed under the assumptions of Constant Returns to Scale as well as Variable Returns to Scale. Industries showing high technical efficiency include Tobacco Products, Refined Petroleum Products, Carpets and Rugs, and Meat and Meat Products. Industries showing low technical efficiency include Refractory Ceramic Products, Electricity Distribution and Control Apparatus, Fish and Fish Products, Basic Precious Metals and Aluminum and its Products. Comparison of mean efficiency scores between exporting and non-exporting industries does not indicate any significant difference between efficiency scores across types of industries. JEL Classification: D24, L6, O14, F14 Keywords: Manufacturing Industries, Technical Efficiency, Stochastic Frontier Analysis, Data Envelopment Analysis, International Trad

Competitive, but too small - productivity and entry-exit determinants in European business services

The paper investigates whether scale effects, market structure, and regulation determine the poor productivity performance of the European business services industry. We apply parametric and nonparametric methods to estimate the productivity frontier and subsequently explain the distance of firms to the productivity frontier by market characteristics, entry- and exit dynamics and national regulation. The frontier is assessed using detailed industry data panel for 13 EU countries. Our estimates suggest that most scale advantages are exhausted after reaching a size of 20 employees. This scale inefficiency is persistent over time and points to weak competitive selection. Market and regulation characteristics explain the persistence of X-inefficiency (sub-optimal productivity relative to the industry frontier). More entry and exit are favourable for productivity performance, while higher market concentration works out negatively. Regulatory differences also appear to explain part of the business services' productivity performance. In particular regulation-caused exit and labour reallocation costs have significant and large negative impacts on the process of competitive selection and hence on productivity performance. Overall we find that the most efficient scale in business services is close to 20 employees and that scale inefficiencies show a hump-shape pattern with strong potential scale economies for the smallest firms and diseconomies of scale for the largest firms. The smallest firms operate under competitive conditions, but they are too small to be efficient. And since this conclusion holds for about 95 out of every 100 European business services firms, this factor weighs heavily for the overall productivity performance of this industry

Technical Efficiency of Pakistan s Manufacturing Sector: A Stochastic Frontier and Data Envelopment Analysis

This paper examines the efficiency of the large-scale manufacturing sector of Pakistan using parametric as well as non-parametric frontier techniques. Production frontiers are estimated for two periods-1995-96 and 2000-01-for 101 industries at the 5-digit PSIC. The results show that there has been some improvement in the efficiency of the large-scale manufacturing sector, though the magnitude of improvement remains small. The results are mixed at the disaggregated level: whereas a majority of industrial groups have gained in terms of technical efficiency, some industries have shown deterioration in their efficiency levels. The results from both the approaches are consistent, and in line with similar studies.Manufacturing Industries, Technical Efficiency, Stochastic Frontier Analysis, Data Envelopment Analysis

Parametric vs.non-parametric efficiency assessment: case of power plants in Turkey

Çalışma boyunca Türkiye’deki çeşitli enerji santrallerinin operasyonel ve uzun vadeli yatırım performansları Stokastik Sınır Analiz (SSA) ve Veri Zarflama Analizi (VZA) kullanılarak karşılaştırıldı. Veri kümesi, özel ve kamu mülkiyetindeki 65 termal, hidroelektrik ve rüzgâr enerji santrallerinden oluşturuldu. Operasyonel ve yatırım performansını yansıtan verimlilik endeksleri ortaya konup incelendi. Analizde ölçek, sabit ve değişken, güvence bölgesi, gevşek tabanlı ölçüm, sistem karşılaştırma ve bilateral tip DEA modelleri ile Cobb-Douglas ve Translog üretim fonksiyonlarını kullanan stokastik sınır analizi kullanıldı. Ölçek getirisinin analizine yönelik VZA ve SSA modellerinin ortaya koyduğu tüm indisler kullanılarak değerlendirmeler yapıldı. Kamu-özel, termal-yenilenebilir karşılaştırmalarının yanı sıra doğal gaz-kömür-petrol santralleri verimlilik performans değerlerine göre karşılaştırıldı. VZA ve SSA metotlarından elde edilen sonuçlar karşılaştırıldı. İlginç verimlilik endeksi ve çeşitli giriş/çıkış faktörleri arasında ilişkiler ortaya kondu ve değerlendirildi. Doğal gazla çalışan elektrik santralleri, yatırım verimliliği açısından kömürle çalışan santrallerden daha iyi performans gösterse de, değişken getiri oranlarına göre operasyonel performansı için tersi geçerlidir.Throughout the study, the operational and long term investment performances of various power plants in Turkey are assessed and compared using Stochastic Frontier Analysis (SFA) and Data Envelopment Analysis (DEA). The data set is composed of 65 thermal, hydro and wind power plants with private and public ownership. Efficiency indices, reflecting operational and investment performance, are described and elaborated. Returns to scale, (constant and variable), assurance region, slack based measure, system comparison and bilateral type DEA models as well as stochastic frontier analysis employing the Cobb-Douglas and Translog production functions are used in the analysis. An analysis of returns to scale is carried out. The properties of the production frontiers are described for all efficiency indices. Public-private sector plants, renewable-thermal plants as well as natural gas-coal versus oil fired plants are compared according to their efficiency performance values. Efficiency scores obtained from DEA and SFA are compared and some relationships are identified. Interesting relationship are identified by elaborating the efficiency indices and various input/output factors. Even though natural gas fired power plants outperforms the coal fired ones in terms of investment efficiency, in general, reverse is true for operational performance under variable returns to scale.Publisher's Versio