Measuring Potential Gains from Mergers among Electricity Distribution Companies in Turkey using a Non-Parametric Model

Necmiddin Bagdadioglu, Catherine Waddams Price () and Thomas Weyman-Jones
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Necmiddin Bagdadioglu: Department of Public Finance, Hacettepe University and Centre for Competition Policy, University of East Anglia
Catherine Waddams Price: Centre for Competition Policy, University of East Anglia
Thomas Weyman-Jones: Department of Economics, Loughborough University

No 06-13, Working Papers from Centre for Competition Policy, University of East Anglia

Abstract: Turkish electricity reform is entering a new phase through the Turkish Government's proposal to create 21 new distribution companies, 18 of them through merger. Two aspects of merger analysis are the operational cost savings and the potential production efficiency gains. This paper concentrates on the second aspect and uses a recently developed methodology to assess the potential effect of these mergers and whether these mergers are efficiency enhancing. This is performed by comparing the actual efficiency levels of observed distribution companies with the merger of proposed aggregated companies. The model is calibrated on panel data from 1999 to 2003 which include measures of physical capital and labour inputs, as well as customer and energy related outputs. The results indicate potential for considerable efficiency gains from the proposed mergers.

Keywords: Efficiency and productivity analysis; data envelopment analysis; electricity distribution (search for similar items in EconPapers)
JEL-codes: C14 G34 L5 L94 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2006-09
New Economics Papers: this item is included in nep-com, nep-cwa, nep-eff and nep-ene
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Persistent link: https://EconPapers.repec.org/RePEc:ccp:wpaper:wp06-13

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