Technical Change and Catching-up: The Electricity Distribution Sector in South America

Abstract

The main purpose of this paper is to analyze technical change in the electricity distribution sector in South America, in the period 1994-1997. We do so by estimating a Maximum Likelihood stochastic frontier. We found that there is no evidence of catching up effects in the sector during this period. Besides, there is partial evidence that suggests that countries which reformed their electricity sector had a better performance than those which did not. We also found an increase in the capital share in the countries that made the reform and an increment in the labor share in the ones that did not make the reform.Technical change; Catching-Up; Stochastic frontier