Productivity growth, technical change and economies of scale of Korean fossil-fuel generation companies, 2001-2012: A dual approach

- TFP did not seem to increase during the study period (2001-2012).
- Technical regress occurred.
- The Korean GENCOs have increased their firm size.
- The optimal size (around 80 TWh) has not yet been reached by any Korean GENCOs.

This paper examines total factor productivity (TFP) growth, technical change and economies of scale measure of Korean fossil-fuel power generation companies (GENCOs) between 2001 and 2012. For the empirical investigation, we estimated the cost function along with specification tests in order to find the most appropriate empirical model. Empirical results show TFP deterioration, technical regress, and economies of scale for the study period. The optimal size of the Korean GENCOs was also found, which is employed in developing policies regarding TFP growth and technical advance.