| dc.description.abstract | We study returns to scale in Norwegian electricity distribution companies. The scale
issue of this sector has become an important political question, and it was for instance
discussed by the Reiten commission (OED, 2014) in a study about the future structure
and organization of the Norwegian electricity network industry. We use panel data
from the Norwegian Water Resources and Energy Directorate (NVE) for the period
from 2004 to 2010. The Data Envelopment Analysis (DEA) method and the
Stochastic Nonparametric Envelopment of Data (StoNED) approach are applied to
examine the scale issue. We show that a majority of the companies are smaller than
the optimal size, in line with Kumbhakar et al. (2014). The performance of
Norwegian distribution companies are influenced by a number of environmental
factors, and some of these factors are negatively correlated with company size.
However, our results show that controlling for environmental factors when estimating
returns to scale does not have a big effect on the estimated optimal sizes. | nb_NO |
