Are CEOs judged on how cost efficient their firms are?
Sammanfattning
This paper investigates whether executive boards consider firm-specific inefficiencies when they change CEOs in the Swedish electricity distribution sector. Firm-level inefficiencies are calculated using data from all Swedish electricity distributors from 2001 to 2022 and a data envelopment analysis (DEA) approach.
DEA has advantages over standard financial key performance indicators since it controls for heterogeneity in inputs and outputs. It is also frequently employed by energy regulators to calculate relative cost inefficiencies.
