Benchmarking and Firm Heterogeneity in Electricity Distribution: A Latent Class Analysis of Germany

In January 2009 Germany introduced incentive regulation for the electricity distribution sector based on results obtained from econometric and nonparametric benchmarking analysis. One main problem for the regulator in assigning the relative efficiency scores are unobserved firm-specific factors such as network and technological differences. Comparing the efficiency of different firms usually assumes that they operate under the same production technology, thus unobserved factors might be inappropriately understood as inefficiency. To avoid this type of misspecification in regulatory practice estimation is carried out in two stages: in a first stage observations are classified into two categories according to the size of the network operators. Then separate analyses are conducted for each sub-group. This paper shows how to disentangle the heterogeneity from inefficiency in one step, using a latent class model for stochastic frontiers. As the classification is not based on a priori sample separation criteria it delivers more robust, statistical significant and testable results. Against this backround we analyze the level of technical efficiency of a sample of 200 regional and local German electricity distribution companies for a balanced panel data set (2001-2005). Testing the hypothesis if larger distributors operate under a different technology than smaller ones we assess if a single step latent class model provides new insights to the use of benchmarking approaches within the incentive regulation schemes

Productivity in Electricity Retail after Market Liberalisation: Analysing the Effects of Ownership and Firm's Governance Structure

This paper, which is one of the first to estimate productivity in retail electricity for a European country after liberalisation, analyses the effect of ownership and governance structure by using a unique dataset of German electricity retailers from 2003 to 2012. An innovative service production function for the retail sector is derived with labour and external services as the main inputs. A structural model is used with a proxy function for productivity to overcome the endogeneity of input choice. Ownership is controlled for in the law of motion for productivity. The results of the dataset used to validate the model show that firm-level productivity did not increase after 2008 and that ownership had no effect on productivity. The results provide useful insights into the link between ownership and productivity in modern public enterprises after liberalisation

EZH2 Depletion Blocks the Proliferation of Colon Cancer Cells

The Enhancer of Zeste 2 (EZH2) protein has been reported to stimulate cell growth in some cancers and is therefore considered to represent an interesting new target for therapeutic intervention. Here, we investigated a possible role of EZH2 for the growth control of colon cancer cells. RNA interference (RNAi)-mediated intracellular EZH2 depletion led to cell cycle arrest of colon carcinoma cells at the G1/S transition. This was associated with a reduction of cell numbers upon transient transfection of synthetic EZH2-targeting siRNAs and with inhibition of their colony formation capacity upon stable expression of vector-borne siRNAs. We furthermore tested whether EZH2 may repress the growth-inhibitory p27 gene, as reported for pancreatic cancer. However, expression analyses of colon cancer cell lines and colon cancer biopsies did not reveal a consistent correlation between EZH2 and p27 levels. Moreover, EZH2 depletion did not re-induce p27 expression in colon cancer cells, indicating that p27 repression by EZH2 may be cell- or tissue-specific. Whole genome transcriptome analyses identified cellular genes affected by EZH2 depletion in colon cancer cell lines. They included several cancer-associated genes linked to cellular proliferation or invasion, such as Dag1, MageD1, SDC1, Timp2, and Tob1. In conclusion, our results demonstrate that EZH2 depletion blocks the growth of colon cancer cells. These findings might provide benefits for the treatment of colon cancer

Potential Gains from Mergers in Local Public Transport: An Efficiency Analysis Applied to Germany

We analyze potential gains from hypothetical mergers in local public transport using the non-parametric Data Envelopment Analysis with bias corrections by means of bootstrapping. Our sample consists of 41 public transport companies from Germany's most densely populated region, North Rhine-Westphalia. We merge them into geographically meaningful, larger units that operate partially on a joint tram network. Merger gains are then decomposed into individual technical efficiency, synergy and size effects following the methodology of Bogetoft and Wang [Bogetoft, P., Wang, D., 2005. Estimating the Potential Gains from Mergers. Journal of Productivity Analysis, 23(2), 145-171]. Our empirical findings suggest that substantial gains up to 16 percent of factor inputs are present, mainly resulting from synergy effects

Innovation, R&D Efficiency and the Impact of the Regulatory Environment: A Two-Stage Semi-Parametric DEA Approach

This paper assesses the relative efficiency of knowledge production in the OECD using a nonparametric DEA approach. Resources allocated to R&D are limited and should therefore be used efficiently given the institutional and legal constraints. This paper presents efficiency scores based on an intertemporal frontier estimation for the period 1995 to 2004 and analyzes the impact of the regulatory environment using the single bootstrap procedure suggested by Simar and Wilson (2007). The empirical evidence supports the hypothesis that barriers to entry, aimed at reducing competition, lower research efficiency by attenuating the incentive to innovate and to allocate resources efficiently

The effect of restructuring electricity distribution systems on firms' persistent and transient efficiency: The case of Germany

Leibniz Commission (SAW-2013-DIW-5