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DEA window analysis and Malmquist index to assess efficiency and productivity in the Spanish electricity sector

Jaime Sánchez-Ortiz (Department of Organization and Business, Faculty of Economics and Business Sciences, University of Cadiz, Cadiz, Spain)
Teresa Garcia-Valderrama (Department of Accounting and Finance, Faculty of Economics and Business Sciences, University of Cadiz, Cadiz, Spain)
Vanesa Rodríguez-Cornejo (Department of Organization and Business, Faculty of Economics and Business Sciences, University of Cadiz, Cadiz, Spain)
Francisca Cabrera-Monroy (Department of Accounting and Finance, Faculty of Economics and Business Sciences, University of Cadiz, Cadiz, Spain)

International Journal of Energy Sector Management

ISSN: 1750-6220

Article publication date: 2 January 2020

Issue publication date: 26 July 2021

512

Abstract

Purpose

The purpose of this paper is to demonstrate that overcapacity and tariff deficit (external constraints) negatively affect the efficiency of distribution firms in the Spanish electricity sector. To do this, the paper is based on the theory of constraints and theory of economic regulation.

Design/methodology/approach

Data envelopment analysis (DEA) window methodology is carried out on the constant scales (I-C) with a sample consisting of five main distribution firms during the period from 2006 to 2015. In turn, an analysis of the Malmquist index is carried out to assess whether it has had a displacement with respect to the efficiency frontier.

Findings

The results show that the overcapacity and the tariff deficit negatively affect the efficiency of the distribution firms of the Spanish electricity sector. In addition, there is an existence of external constraints that affect the activities of regulated organisations and the importance of adequate legislation in regulated sectors.

Originality/value

This study defines a model that shows how the efficiency problems associated with electricity distribution companies such as productive overcapacity or tariff deficit can be measured based on the theory of constraints and theory of economic regulation.

Keywords

Citation

Sánchez-Ortiz, J., Garcia-Valderrama, T., Rodríguez-Cornejo, V. and Cabrera-Monroy, F. (2021), "DEA window analysis and Malmquist index to assess efficiency and productivity in the Spanish electricity sector", International Journal of Energy Sector Management, Vol. 15 No. 4, pp. 765-788. https://doi.org/10.1108/IJESM-03-2019-0020

Publisher

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Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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