European Electricity Market Reforms: Any Signs of Efficiency Improvements?

This paper investigates whether European electricity market reforms have induced any changes in rm eciency either through productive, allocative or dynamic eciency improve- ments. In particular, this ex-post analysis looks closely at productivity e ects of changing industry structure, ownership structure and regulation with respect to barriers to entry and access to wholesale and retail markets. Based on the European rm-level data for the period 1996-2007, the results indicate sluggish productivity improvements of European electricity rms due to reforms implemented in the last decade. In particular, productivity gains are associated with high-productivity rms close to the technology frontier, while no signicant impact is found for the laggards. Looking from a dynamic perspective, it seems that the clos- est are the rms to the frontier the more they are able to improve productivity in response to liberalization e orts stimulating competition.