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

Carlos Barros, Zhongfei Chen, Shunsuke Managi and Olinda Sequeira Antunes

Energy Economics, 2013, vol. 36, issue C, 511-517

Abstract: 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.

Keywords: Efficiency; Electricity utilities; China (search for similar items in EconPapers)
JEL-codes: O13 O14 O33 Q25 Q50 R50 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:36:y:2013:i:c:p:511-517

DOI: 10.1016/j.eneco.2012.10.007

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