TY - JOUR
T1 - Vertical and horizontal economies in the electric utility industry
T2 - An integrated approach
AU - Piacenza, Massimiliano
AU - Vannoni, Davide
PY - 2009/9
Y1 - 2009/9
N2 - The empirical literature on the cost structure of the electric utility industry traditionally focused on the measurement of specific technological properties: 1) scale economies in generation or distribution; 2) multi-product (or horizontal) scope economies at one particular stage; 3) multi-stage (or vertical) scope economies. By adopting an integrated approach, which simultaneously considers both horizontal and vertical aspects of the technology, we find the presence, on a sample of Italian electric utilities, of both vertical integration gains and horizontal scope economies at the downstream stage. In the light of recent regulatory reforms aiming at restructuring European electricity markets, our findings have important policy implications as for the proper configuration of the industry. Moreover, this methodology can be usefully applied to the study of the production structure of other public network utilities involved in similar vertical and horizontal reorganization processes.
AB - The empirical literature on the cost structure of the electric utility industry traditionally focused on the measurement of specific technological properties: 1) scale economies in generation or distribution; 2) multi-product (or horizontal) scope economies at one particular stage; 3) multi-stage (or vertical) scope economies. By adopting an integrated approach, which simultaneously considers both horizontal and vertical aspects of the technology, we find the presence, on a sample of Italian electric utilities, of both vertical integration gains and horizontal scope economies at the downstream stage. In the light of recent regulatory reforms aiming at restructuring European electricity markets, our findings have important policy implications as for the proper configuration of the industry. Moreover, this methodology can be usefully applied to the study of the production structure of other public network utilities involved in similar vertical and horizontal reorganization processes.
UR - http://www.scopus.com/inward/record.url?scp=77950600919&partnerID=8YFLogxK
U2 - 10.1111/j.1467-8292.2009.00392.x
DO - 10.1111/j.1467-8292.2009.00392.x
M3 - Article
SN - 1370-4788
VL - 80
SP - 431
EP - 450
JO - Annals of Public and Cooperative Economics
JF - Annals of Public and Cooperative Economics
IS - 3
ER -