(Thursday, 22nd May 2014)
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The wave of privatization and institutional reforms that swept network industries in Europe during the 1990s dramatically affected the incentives, strategies, and performance of regulated utilities. This process, which was intended to improve the efficiency and service quality of the EU public utility sector, has a strong effect on these firms’ investment and capital structure decisions, market value, dividend and compensation policies. The delegation of regulatory tasks to Independent Regulatory Authorities (IRAs), promoted by the European Commission, was meant to avoid the government’s potential conflict of interest in its dual role as an owner and a regulator of network infrastructure firms. Up to date, many large utilities are still partially owned by the state, and the interaction between regulation and (government) ownership has to be deeply explored if one wishes to understand their behavior and performance as well as the achievements of the original liberalization policies.
The implementation of structural reforms varies considerably across countries and sectors, thus providing an interesting ground for a comparative analysis of the effects of different regulatory regimes and mechanisms as well as ownership patterns, bringing together different aspects of the regulatory reforms (down to the choice between cost-based and incentive regulation) and key features of the political institutions in the European countries.
This workshop will provide an overview of some of the recent developments in this area of inquiry, also from the methodological point of view (research design, empirical modeling and identification strategy).
Bibliographical references :
Must read reference : Bortolotti B., Cambini C., Rondi L. (2013), “ Reluctant Regulation”, Journal of Comparative Economics, 41, 804-829.
Armstrong M., Sappington D.E.M. (2006), “Regulation, Competition, and Liberalization”, Journal of Economic Literature, XLIV (June), 325-366.
Bortolotti B., Cambini C., Rondi L., Spiegel Y. (2011), “Capital Structure and Regulation: Do ownership and Independent regulation Matter?”, Journal of Economics and management Strategy, 20(2), 517-564.
Cambini C., Rondi L. (2014), “Independent Agencies, Political Interference and Firm Investment Evidence from the European Union”.
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