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Convergence of Operational Efficiency in China’s Provincial Power Sectors

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  • Vishal Chandr Jaunky
  • Lin Zhang

Abstract

To analyze the operational efficiency of Chinese power sector at the provincial level, this paper studies the convergence of technical efficiency and productivity growth of electricity across 29 Chinese provinces during the period 1996-2008 using several convergence models. Depending on the model being employed, we find evidence of convergence of operational efficiency towards either a national steady state or towards their own steady states, with the latter process occurring more rapidly. In essence, our study provides evidence of negative effects of government intervention. Additionally, we use the nonparametric distribution dynamics approach to analyze intra-distributional dynamics of technical efficiency and productivity. We find some support for productivity convergence while technical efficiency does not converge for provinces with relatively low levels. We discuss policy implementations based on our model results and highlight several aspects for policy making in the power sector reforms currently being undertaken.

Suggested Citation

  • Vishal Chandr Jaunky & Lin Zhang, 2016. "Convergence of Operational Efficiency in China’s Provincial Power Sectors," The Energy Journal, , vol. 37(1_suppl), pages 3-28, January.
    • Handle: RePEc:sae:enejou:v:37:y:2016:i:1_suppl:p:3-28
    DOI: 10.5547/01956574.37.SI1.vjau
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    1. Aude Le Lannier & Simon Porcher, 2014. "Efficiency in the public and private French water utilities: prospects for benchmarking," Applied Economics, Taylor & Francis Journals, vol. 46(5), pages 556-572, February.
    2. Chu Wei & Jinlan Ni & Manhong Shen, 2009. "Empirical Analysis of Provincial Energy Efficiency in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 17(5), pages 88-103, September.
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