International comparisons of productivity and its determinants in the natural gas industry

The objective of this paper was to evaluate the performance of the natural gas industry using an inter-country comparison of productivity level and its determinants. Three methodologies: multilateral Tornqvist productivity analysis; managerial index system analysis; and non-parametric efficiency analysis, are employed to make a methodological cross-checking and to perform diversified analysis. From the empirical results, we identified the level and growth rate of productivity of individual firms. The results also indicated that the Korean gas industry has shown a relatively low level of productivity. From the results of managerial performance index analysis, we found that during the recent years of regulatory changes, the final price of gas has decreased dramatically while the productivity growth has not been enough to offset the effect of decreased output price, which has resulted in decreased profit. We also examine the extent of the allocative, scale, and managerial efficiency as source components of the overall efficiency based on the performance of best-practiced. With the results of this study, an effective policy measure could be established to improve the productivity and the overall managerial performance in the natural gas industry. (C) 1999 Elsevier Science B.V. All rights reserved.