Vertical disintegration in the European electricity sector: Empirical evidence on lost synergies

The EU has been promoting unbundling of the transmission grid from other stages of the electricity supply chain with the aim of fostering competition in the upstream stage of electricity generation. At present, ownership unbundling is the predominant form of unbundling in Europe. From a policy perspective, a successful unbundling regime would require that the benefits of increased competition in power generation would at least offset the associated efficiency losses from vertical divestiture. Since evidence on this topic is scarce, this study helps fill this void by empirically estimating the magnitude of economies of vertical integration (EVI) between electricity generation and transmission based on a quadratic cost function. For this purpose we employ unique firm-level panel data of European electricity utilities. Our results confirm the presence of substantial EVI of 14% for the median sized integrated utility. Moreover, EVI tend to increase with firm size.     

The Role of Competition in Natural Monopoly: Costs, Public Ownership, and Regulation

Conventional policy for industries with very high economies of scale is to permit monopoly but to subject it to regulation or public ownership. Since the latter may not result in cost minimization, however, it is possible that competition, by forcing firms to operate at the cost frontier, may be less costly despite sacrificing some scale economies. The paper sets out the relevant analytical considerations, estimates a cost function for electric distribution utilities in the U.S., and tests for the relative costs of monopoly and duopoly utilities. Among other notable findings, it concludes that competition does indeed lower net costs.     

Optimal Size in the Waste Collection Sector

The purpose of this study is to analyze the cost structure of a sample of Italian wastecollection firms in order to assess economies of scale and density and, therefore, definethe optimal size of the firms. A total and a variable translog cost function were estimated using panel data for a sample of 30 firms operating at the provincial level over the period 1991–1995.The empirical evidence suggests that franchised monopoly, rather than side-by-sidecompetition, is the most efficient form of production organization in the waste collection industry. Further, the majority of firms are not operating at optimal scale.     

A conceptual framework for evaluating the most cost-effective intervention along the supply chain to improve food safety

This paper develops a conceptual framework for choosing the most cost-effective intervention along the supply chain to improve food safety. This framework identifies both the initial level of on-farm infection and the potential for new infection post farm-gate as key parameters influencing the relative effectiveness of on-farm and abattoir interventions. In addition, the potential for cost economies of scale in implementing interventions at abattoir compared to on-farm is shown to be a further factor determining the relative cost-effectiveness of these interventions. Overall, it is suggested by the analysis in this paper that successful abattoir interventions will typically be more cost-effective than successful on-farm interventions. These findings are consistent with existing case study evidence.     

A classification of business-to-business buying decisions: risk importance and probability as a framework for e-business benefits

Business-to-business (B2B) markets have been considered an attractive e-business venue for the realization of cost reduction and exchange creation utilities. However, as marketers have long argued, there are different types of buying situations, and the benefits sought in each may vary substantially. The present work builds on the thinking of previous industrial buying typologies by integrating perceived risk concepts into the business buying decision. Specifically, we develop a classification grid of industrial buying situations and then explicitly link likely e-business benefits to the various situations. The proposed framework holds implications for management and research related to supply chain relationships.     

Deregulation and environmental differentiation in the electric utility industry

This paper analyzes how economic deregulation impacts firm strategies and environmental quality in the electric utility industry. We find evidence that the deregulation introduced to this historically staid industry has stimulated environmental differentiation. Differentiation is most likely to appear where its point of uniqueness is valued by customers, and we confirm this relationship in our sample. Specifically, utilities that served customers who exhibited higher levels of environmental sensitivity generated more ‘green’ power. The tendency for firms to differentiate in this way is lessened if they are relatively more dependent on coal‐fired generation or relatively more efficient. Thus, there is evidence that firms sort themselves into either differentiation or low‐cost strategies as the competitive realities of a deregulated world unfold. Deregulation and the ensuing environmental differentiation illustrate how utilities exploited formerly unmet customer demand for green power. The result has been greater levels of renewable generation and, hence, a cleaner environment. Copyright © 2007 John Wiley & Sons, Ltd.     

Asset specificity and economic organization

This paper examines the optimization problem of firm and market organization in which both production cost and transaction cost differences are expressed as a function of asset specificity. In general, markets enjoy advantages by aggregating the demands of many buyers, thereby realizing economies of scale or scope. Such production cost savings need to be assessed in relation to the transaction cost advantages that internal organization sometimes enjoys over markets in adapting to changed circumstances. As it turns out, both production cost economies and the transaction cost differences between firm and market organization vary systematically with the characteristics of the investments. This paper employs a unified framework to assess the choice of organization form. The condition of asset specificity is featured.     

Marginal cost and second-best pricing for water services

This paper examines the pricing strategy of water services relative to marginal cost and second-best pricing rules, which is a principal concern of utility commissions. The water utility is viewed as a multiproduct firm providing residential and nonresidential services, and a translog multiproduct cost function is estimated for a cross section of U.S. water utilities. Marginal costs are estimated and combined with demand elasticities to simulate second-best prices for water services. Results show that while the existing price structure is quite different from the one suggested by marginal costs, it does not depart substantially from the second-best optimum.     

Multiproduct Outputs and Scale Economies in Electric Power Production: Some New Estimates

The present study offers an argument, through a technical exposition, which suggests that there are cost differences inherent in serving different types of buyers in the electric utilities industry. To this end, we employ a translog joint cost function (for electricity production) with three outputs, which allows for the examination of the cost differences between wholesale and retail trade for vertically integrated, investor-owned companies in the industry. The regression estimates suggest different costs at the means, however the estimated marginal cost curve for wholesale power is not as robust as those for low-voltage and industrial power.     

引入空间维度的经济学分析——新古典经济学理论批判

以新古典经济学为核心的现代主流经济学假设了一个没有空间的世界。克鲁格曼认识到考虑空间维度的重要性,他构造出一个描述收益递增、运输成本和需求相互作用机制的模型,用于解释制造业的集聚现象。在引入空间维度的经济学世界,运输成本是克服空间障碍所花费的成本,运输成本必然要进入描述人们经济行为的需求函数和供给函数。经济过程是规模经济、运输成本、产业间分工和市场范围相互作用的动态过程。需求和供给仅仅是该动态过程的一个侧面,与其说存在静态均衡,不如说存在变化的趋势或方向。引入空间维度的经济学更接近现实的经济,可以解决不考虑空间维度所导致的新古典经济学的理论困境,可以更深入地说明专业化分工和贸易现象,可以更深入地解释交通运输与经济发展的关系。     

Estimating scale economies of the wireless telecommunications industry using EVA data

This paper proposes a new estimation method of total cost and average cost curves and applies it to the telecommunications industry. The method is more flexible and entails less hassle for data collection than traditional methods. The results show that the long-run average cost (LRAC) curve is downward sloping, revealing the presence of economies of scale in production. The two largest Korean mobile network operators are realizing full economies of scale, while the smallest operator is not. Finally, the paper recommends three policy alternatives that the Ministry of Information and Communication of Korea can draw on to increase efficiency in the Korean mobile telecommunications market.     

Explaining Location Patterns of Suburban Offices

Suburban office markets exhibit a pattern of variegated clustering that is little explained by the conventional theories of urban form based on agglomeration effects and the cost of distance. To explain the pattern, this paper introduces industry economies of scale for "Class A" offices. Empirical tests for industry economies of scale are reported, based on data from the office market of Houston, Texas. The models presented, under conditions typical of North American cities in recent decades, imply the patterns of variegated clustering that are observed. They suggest a sequence of clusters, increasing in size and distance from the central business district. Further, they imply the potential for mass movement by tenants from older clusters to new.     

Municipal electric utilities’ role in telecommunications services

Municipal electric utilities (MEUs) are increasingly expanding into telecommunications services. Such entry is interesting in several respects. First, MEUs marry two potential pathways for the growth of telecommunications access infrastructure and services: public ownership of last-mile facilities and electric power company expansion into telecommunications. Second, municipalities are key early adopters of next generation access technology in the form of both fiber-to-the-home (FTTH) and broadband wireless (e.g., WiMax) systems. Third, MEUs are at the nexus of the debate over the proper role for local government in promoting broadband Internet access. Most homes in the United States are served by investor-owned local telephone and cable television providers, using company-owned wireline infrastructure. These providers have generally opposed municipal entry, arguing that it will crowd out private investment and represents an unfair and less efficient form of competition. A number of states have acted to limit—or in some cases—to promote such entry. Before engaging in this debate, it is necessary to have a clearer picture of the current state of municipal entry and the local demographic, cost, industry, and policy factors that influence its evolution. To address this need, this paper reports the results of an empirical analysis of MEUs that provide communications services to the public. This analysis shows that MEUs are more likely to offer such services if they also provide internal communication services to support their electric utility operations (scope economies); are relatively close to metropolitan areas (lower backhaul costs); are in markets with fewer competitive alternatives (cable modem and DSL service availability limited); and which are less encumbered by regulatory barriers to entry (in communities in states which do not restrict municipal entry into telecommunication services). Of these results, the competitive impacts are the least straight-forward to interpret, suggesting richer dynamics and avenues for further research.     

The involvement of utilities in the development of broadband infrastructure: A comparison of EU case studies

Energy companies and other utility providers have been often involved in the provision of telecommunications services. Nevertheless, their contribution to broadband development has varied significantly over time. In the late 1990s, both local and national utilities in the European Union (EU) engaged in the provision of broadband networks, but only few of them managed to establish themselves as major broadband providers. More recently, new projects involving national utilities have been announced in several EU countries, opening new scenarios for utilities’ contribution to Next Generation Access (NGA) development. This paper identifies and explores the factors affecting the entry and the success of utilities in the EU broadband market, through the comparison of four case studies from four EU countries (Germany, Italy, Sweden and the UK). The evolution of utility involvement in the EU broadband markets is assessed against the interaction of market, technology and policy factors, focusing on the impact of policy and regulatory measures. As a result, this paper provides fruitful insights into the relevance and effectiveness of public interventions in broadband markets. Across the four case studies, public support and public ownership emerged as the main drivers for the involvement of utilities in EU broadband markets, with regulatory measures and economies of scope exerting a limited and decreasing influence. However, the contribution of utilities has varied significantly across the cases studied, reflecting the different approaches taken at national and local level to support broadband development, in spite of the common regulatory framework.     

A multi-item supply chain with credit periods and weight freight cost discounts

It is possible to realize considerable savings by aggregating the replenishment of a variety of items in a multi-item supply chain. This joint multi-item replenishment policy has already been widely applied in a variety of industries. This type of policy may make it possible for the retailer to take advantage of transport economies of scale by the utilization of freight discounts for greater weight. In addition, a supplier will often extend forward financing to a retailer. In this paper, a multi-item supply chain with a credit period and weight freight cost discounts is considered. The retailer bears the freight costs, but the freight carrier provides freight-transport discounts that are positively related to the weight of the cargo transported. From both the individual and the channel perspectives, we deal with the dual problems of determining the ideal supplier credit period, and of the best way for the retailer to make multi-item replenishment and pricing decisions, while still maximizing profits. We outline the optimal properties and develop algorithms for solving the problems described, as well as discuss the impact of the freight cost discounts, the inventory holding cost, and the interest rate on the behavior of both parties.     

基于Logistic组合模型的中国民用汽车保有量预测

经济的发展和人民生活水平的提高使我国民用汽车保有量急速上升,同时导致公共设施和能源供应等矛盾凸显。客观、准确的未来中国汽车保有量预测是解决上述问题的前提。本文以传统Lo-gistic模型为基础,借鉴灰色理论累加生成数据处理方法和级差格式,对预测参数进行估计,同时将模型中扩散速度函数化,并建立以误差标准差为权重的民用汽车保有量的Logistic组合预测模型。该模型能很好地避免传统预测模型中预测参数主观化,预测环境常态化的缺点,使模型能够客观、动态地反映未来中国汽车保有量的扩散趋势。最后结合中国历年民用汽车历史数据,对未来十年中国民用汽车保有量进行预测。预测结果表明:未来十年中国的民用汽车保有量还将快速增长,到2020年中国民用汽车保量将超过2.3亿辆。     

中国商业银行规模经济与范围经济的实证分析

本文通过对中国商业银行1996年到2001年的经营情况进行实证分析，估算出各家银行的规模经济系数和范围经济系数，发现大部分商业银行规模不经济而范围经济，规模不经济的程度与银行资产规模呈正相关关系，股份制商业银行的范围经济系数高于国有商业银行的范围经济系数，范围经济与银行资产规模没有必然的联系。在此基础上，本文提出了相应的政策主张。     

Optimal Concentration and Deadweight Losses in Canadian Manufacturing

When economies of scale are impontant, there may be too many firms in a market to effectively exploit these scale economies. Although more firms imply reduced market power, this may not offset the adverse impact of higher unit cost. We explore this trade-off by estimating for 107 Canadian industries optimal concentration, this being the concentration that maximizes, for given firm conduct, producers and consumers' surplus. We then calculate deadweight losses as the difference between total surplus at optimal concentration and total surplus at current concentration levels. Among the conclusions are that the majority of industries have concentration that is too low.     

简析我国经济发展进入高成本期对电力企业的冲击及应对思路

随着社套进步、经济发展,中国企业生产进入高成本期。简要分析电力企业进入高成本期的主要原因及其应时高成本的思路。     

中间性组织的必要性及其组织功能

现代经济发展的过程伴随着中间性组织的成长，中间性组织作为联系个人、企业和市场的制度安排和组织形态，具有节省交易费用、形成外部经济效益、改善经济环境以及完善组织运行的综合功能。一个地区、一国市场的成熟程度以及企业和产业竞争力的状况，与中间组织直接相关。为提高地区竞争力和改善投资环境，采取措施促进商会、行业协会、企业集群、非政府组织以及企业和产业支持机构等中间性组织的发展，是一项关键性的战略选择。