Empirical evidence on the operational efficiency of National Oil Companies

Abstract

On the basis of application of both data envelopment analysis and stochastic frontier estimation applied to a panel of 78 firms, we present empirical evidence on the revenue efficiency of National Oil Companies (NOCs) and private international oil companies (IOCs). We find that with few exceptions, NOCs are less efficient than IOCs. In addition, much of the inefficiency can be explained by differences in the structural and institutional features of the firms, which may arise due to different firms’ objectives.

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Abbreviations

NOC:

National Oil Company

NOCs:

National Oil Companies

IOC:

International oil company

IOCs:

International oil companies

EIA:

Energy Information Administration of United States Department of Energy

DEA:

Data envelopment analysis

SFA:

Stochastic frontier analysis

CRS:

Constant returns to scale

VRS:

Variable returns to scale

OPEC:

Organization of the petroleum exporting countries

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Correspondence to Peter R. Hartley.

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Eller, S.L., Hartley, P.R. & Medlock, K.B. Empirical evidence on the operational efficiency of National Oil Companies. Empir Econ 40, 623–643 (2011). https://doi.org/10.1007/s00181-010-0349-8

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Keywords

  • National Oil Companies
  • Data envelopment
  • Stochastic frontier

JEL classification codes

  • L33
  • L71
  • D24
  • C14
  • C23