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Year 2017, Volume: 7 Issue: 3, 86 - 94, 01.09.2017

Abstract

Economies of Scale, Technical Change, and Total Factor Productivity Growth of the Saudi Electricity Sector

Year 2017, Volume: 7 Issue: 3, 86 - 94, 01.09.2017

Abstract

This paper aims to accomplish two objectives. The first is to extend the existing method of total factor productivity growth decomposition by incorporating network characteristics. The second objective is to empirically evaluate technical change and productivity of the Saudi electricity sector. The results show that the Saudi electricity sector operates under the presence of economies of output density, economies of customer density, and diseconomies of scale. The technology used in the Saudi electricity sector is a cost saving technology. It is characterized as fuel using, capital neutral, and energy saving technology. The estimated average technical change term is positive. It indicates a cost increase during the timeframe of this study. The estimated average total factor productivity growth is positive using both the proposed and existing method. Compared with the proposed method, the existing method overestimated total factor productivity growth of the Saudi electricity sector. Furthermore, the paper estimated an optimal scale of output to be almost 11 percent larger than the maximum output level generated by the Saudi Electricity Company. The paper concludes that the Saudi Electricity Company needs to expand its size to reach the optimal output level

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Details

Primary Language English
Subjects Engineering
Other ID JA63DA47NE
Journal Section Research Article
Authors

Mohammed Al-mahish This is me

Publication Date September 1, 2017
Published in Issue Year 2017 Volume: 7 Issue: 3

Cite

APA Al-mahish, M. (2017). Economies of Scale, Technical Change, and Total Factor Productivity Growth of the Saudi Electricity Sector. International Journal of Energy Economics and Policy, 7(3), 86-94.
AMA Al-mahish M. Economies of Scale, Technical Change, and Total Factor Productivity Growth of the Saudi Electricity Sector. IJEEP. September 2017;7(3):86-94.
Chicago Al-mahish, Mohammed. “Economies of Scale, Technical Change, and Total Factor Productivity Growth of the Saudi Electricity Sector”. International Journal of Energy Economics and Policy 7, no. 3 (September 2017): 86-94.
EndNote Al-mahish M (September 1, 2017) Economies of Scale, Technical Change, and Total Factor Productivity Growth of the Saudi Electricity Sector. International Journal of Energy Economics and Policy 7 3 86–94.
IEEE M. Al-mahish, “Economies of Scale, Technical Change, and Total Factor Productivity Growth of the Saudi Electricity Sector”, IJEEP, vol. 7, no. 3, pp. 86–94, 2017.
ISNAD Al-mahish, Mohammed. “Economies of Scale, Technical Change, and Total Factor Productivity Growth of the Saudi Electricity Sector”. International Journal of Energy Economics and Policy 7/3 (September 2017), 86-94.
JAMA Al-mahish M. Economies of Scale, Technical Change, and Total Factor Productivity Growth of the Saudi Electricity Sector. IJEEP. 2017;7:86–94.
MLA Al-mahish, Mohammed. “Economies of Scale, Technical Change, and Total Factor Productivity Growth of the Saudi Electricity Sector”. International Journal of Energy Economics and Policy, vol. 7, no. 3, 2017, pp. 86-94.
Vancouver Al-mahish M. Economies of Scale, Technical Change, and Total Factor Productivity Growth of the Saudi Electricity Sector. IJEEP. 2017;7(3):86-94.