Examining the cost efficiency of Chinese hydroelectric companies using a finite mixture model

Barros, Carlos Pestana, Chen, Zhongfei, Managi, Shunsuke, & Antunes, Olinda Sequeira (2013) Examining the cost efficiency of Chinese hydroelectric companies using a finite mixture model. Energy Economics, 36, pp. 511-517.

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This paper evaluates the operational activities of Chinese hydroelectric power companies over the period 2000-2010 using a finite mixture model that controls for unobserved heterogeneity. In so doing, a stochastic frontier latent class model, which allows for the existence of different technologies, is adopted to estimate cost frontiers. This procedure not only enables us to identify different groups among the hydro-power companies analysed, but also permits the analysis of their cost efficiency. The main result is that three groups are identified in the sample, each equipped with different technologies, suggesting that distinct business strategies need to be adapted to the characteristics of China's hydro-power companies. Some managerial implications are developed. © 2012 Elsevier B.V.

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ID Code: 75384
Item Type: Journal Article
Refereed: Yes
Keywords: China; Efficiency; Electricity utilities
DOI: 10.1016/j.eneco.2012.10.007
ISSN: 01409883
Subjects: Australian and New Zealand Standard Research Classification > ECONOMICS (140000) > APPLIED ECONOMICS (140200)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Economics & Finance
Copyright Owner: Elsevier
Deposited On: 21 Aug 2014 04:24
Last Modified: 22 Aug 2014 04:06

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