Growth and Structure of Firms: The Formation of Conglomerates in the Brazilian Electric Sector

Authors

  • André Luis da Silva Leite Universidade Federal de Santa Catarina (CAD/UFSC)
  • Nivalde José de Castro Universidade Federal do Rio de Janeiro

Keywords:

Electricity Sector, Firm Growth, Transaction Costs, Conglomerates.

Abstract

The Brazilian electric sector has, in the last decade, faced two significant institutional reforms. The first one, in 1996, aimed to introduce competition in the generation sector, and created a marketing sector, in addition to increasing participation of private capital, through privatization. The second, in 2004, attempted to correct the mistakes of the first one, that culminated in the rationing in 2001, and increased State participation in the sector. At the same time, it is possible to notice that, in recent years, many large companies have been structured as Conglomerates. Thus, the purpose of this paper is to analyze the growth and structuring process of companies in the Brazilian electric sector. This is a theoretical and empirical work, with primary and secondary data. Primary data were obtained from semi-structured interviews with seven stakeholders occupying strategic positions in many organizations of the sector and in institutions directly linked to it. Due to the subjective characteristics of the data, the method of analysis is interpretative. The paper shows that in the analyzed firms, growth movement is of defensive nature, due to the current governance structure. In this sense, firms undertake vertical integration through contracts with firms of the same conglomerate. Overall, the growth inducers are external, especially the governance structure of the electricity sector. The main contribution of the paper is to show that the institutional environment is an important inducer of growth of companies.

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Author Biographies

  • André Luis da Silva Leite, Universidade Federal de Santa Catarina (CAD/UFSC)
    Professor do Departamento de Ciências da Administração da Universidade Federal de Santa Catarina (CAD/UFSC) – Florianópolis-S C, Brasil Pós-Doutor em Economia pela Universidade Federal do Rio de Janeiro (UFRJ) Mestre e Doutor em Engenharia de Produção pela Universidade Federal de Santa Catarina (UFSC). Pesquisador associado do Grupo de Estudos do Setor de Energia Elétrica (GESEL/IE/UFRJ)
  • Nivalde José de Castro, Universidade Federal do Rio de Janeiro
    Professor Adjunto da Universidade Federal do Rio de Janeiro – Rio de Janeiro- Coordenador do Grupo de Estudos do Setor de Energia Elétrica (GESEL/IE/UFRJ) Doutor em Educação pela Universidade Federal do Rio de Janeiro Mestre em Economia da Indústria e da Tecnologia pela Universidade Federal do Rio de Janeiro. Graduado em Economia pela Universidade Federal do Rio de Janeiro

Published

2014-09-03

Issue

Section

Economia das Organizações

How to Cite

Growth and Structure of Firms: The Formation of Conglomerates in the Brazilian Electric Sector. (2014). REGE Revista De Gestão, 21(3), 343-359. https://www.revistas.usp.br/rege/article/view/99947