EconPapers    
Economics at your fingertips  
 

Governance strategies and transaction costs in a renovated electricity market

Guilherme Signorini, R. Brent Ross and H. Christopher Peterson

Energy Economics, 2015, vol. 52, issue PA, 151-159

Abstract: This study applies a transaction cost economics (TCE) framework to examine how economic agents adopt governance strategies in Brazil's recently renovated electricity market. In light of a well-established TCE model, four attributes of transactions (i.e., asset-specificity, uncertainty, complexity, and frequency) are examined for three unregulated transactions between generating firms and final consumers. The qualitative analysis of attributes unfolds into a comparative analysis of theory-predicted governance strategies versus strategies observed in the marketplace. It is argued that Williamson's model continues to effectively predict the most efficient governance strategy in the sense of minimizing transaction costs and safeguarding idiosyncratic assets. Misalignment between theory predictions and observations, however, suggests that two additional concepts – implementability and reputation – must be examined alongside with Williamson's four attributes of transactions in order to better explain strategic decisions in Brazil's electricity market. Capital availability, existence of compatible partners, and reputation play crucial roles in explaining those decisions.

Keywords: Power market; Utility; Deregulation; Intervention; Brazil (search for similar items in EconPapers)
JEL-codes: D23 L51 L94 M21 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0140988315002868
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:52:y:2015:i:pa:p:151-159

Access Statistics for this article

Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

More articles in Energy Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2018-05-29
Handle: RePEc:eee:eneeco:v:52:y:2015:i:pa:p:151-159