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This study analyses the main articles that estimate cost functions in the electricity utility industry with a view to studying of the initial arguments for proposing competition and vertical disintegration. The works reviewed here, in general terms, confirm the initial arguments in favour of the deregulation process, mainly, the exhaustion of scale economies for moderate size firms in generation and...
The Spanish electric sector is empirically analysed using a multistage-multiproduct quadratic cost function estimated with data on firms from 1985 to 1996. Economies of both vertical (EVI) and horizontal (EHI) integration are calculated through economies of scope. Estimated EVI indicate that joint generation and distribution saves 6.5% of costs, lower than what has been obtained in similar studies...
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