LOCAL MONOPOLY, NETWORK EFFECTS AND TECHNICAL EFFICIENCY – EVIDENCE FROM TAIWAN’S NATURAL GAS INDUSTRY

Ting-Kun Liu

Global Journal of Business Research, 2011, vol. 5, issue 1, 55-63

Abstract: This paper examines the optimal number of natural gas firms in each region of Taiwan. In order to separate large local monopoly companies from the small ones, this paper constructs a firm-level panel data analysis for the industry covering the period 1995-1999. The optimal number of firms in each region is estimated by using the minimum efficient scale theory. In addition, a non-neutral stochastic frontier production function is used to detect the impact of the local monopoly, the network effects and cost structure on the natural gas firms’ technical efficiency.

Keywords: Local monopoly; network effect; non-neutral stochastic frontier production function; technical efficiency; natural gas industry (search for similar items in EconPapers)
JEL-codes: D42 L95 O30 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (1)

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