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Corporatization and Firm Performance: Evidence from Publicly-Provided Local Utilities

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Author Info

  • Cambini Carlo

    (Politecnico di Torino and HERMES-Italy)

  • Filippini Massimo

    (University of Lugano and ETH Zurich-Switzerland)

  • Piacenza Massimiliano

    (University of Torino, Ceris-CNR and HERMES-Italy)

  • Vannoni Davide

    (University of Torino and Collegio Carlo Alberto)

Abstract

This study investigates the effects of the corporatization process – i.e., the transformation of a municipal firm into a limited liability company – on the production costs of local public services whose ownership is maintained by the local government. Theoretical analysis predicts that, even without privatization, corporatization is a potentially effective way to improve efficiency (Shleifer and Vishny, 1994; Stiglitz, 2000). We explore this issue by using information on a typical local utility, such as the bus service provided by public transit systems in Italy, which experienced a reform of the governance towards the corporatization structure during the ’90s. The results on a sample of 33 local bus companies over the period 1993-2002 show that, even if public ownership persists, the transformation of a municipal enterprise into an autonomous company – corresponding to the first stage of the corporatization of local utilities in Italy – or into a limited liability company exerts a reducing impact on production costs.

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File URL: http://www.degruyter.com/view/j/rle.2011.7.issue-1/rle.2011.7.1.1428/rle.2011.7.1.1428.xml?format=INT
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Bibliographic Info

Article provided by De Gruyter in its journal Review of Law & Economics.

Volume (Year): 7 (2011)
Issue (Month): 1 (July)
Pages: 191-213

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Handle: RePEc:bpj:rlecon:v:7:y:2011:i:1:n:9

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References

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Citations

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Cited by:
  1. Anna Menozzi & María Gutiérrez Urtiaga & Davide Vannoni, 2012. "Board composition, political connections, and performance in state-owned enterprises," Industrial and Corporate Change, Oxford University Press, vol. 21(3), pages 671-698, June.
  2. Graziano Abrate & Federico Boffa & Fabrizio Erbetta & Davide Vannoni, 2013. "Corruption, Accountability and Efficiency. An Application to Municipal Solid Waste Services," Carlo Alberto Notebooks 316, Collegio Carlo Alberto.
  3. Fabio Monteduro, 2014. "Public–private versus public ownership and economic performance: evidence from Italian local utilities," Journal of Management and Governance, Springer, vol. 18(1), pages 29-49, February.
  4. Graziano Abrate & Fabrizio Erbetta & Giovanni Fraquelli & Davide Vannoni, 2011. "The Costs of Disposal and Recycling. An Application to Italian Municipal Solid Waste Services," Working papers 20, Former Department of Economics and Public Finance "G. Prato", University of Torino.
  5. Fabrizio Erbetta & Giovanni Fraquelli & Anna menozzi & Davide Vannoni, 2011. "The determinants of board compensation in SOEs: An application to Italian public utilities," Working papers 24, Former Department of Economics and Public Finance "G. Prato", University of Torino.
  6. Germà Bel & Jordi Rosell, 2014. "“Public and Private Production in a Mixed Delivery System: Regulation, Competition and Costs”," IREA Working Papers 201418, University of Barcelona, Research Institute of Applied Economics, revised May 2014.
  7. Anna Menozzi & Fabrizio Erbetta & Giovanni Fraquelli & Davide Vannoni, 2014. "The determinants of board compensation in SOEs: an application to Italian local public utilities," Applied Financial Economics, Taylor & Francis Journals, vol. 24(3), pages 145-159, February.

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