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Measuring the productivity growth of Malaysia's water sector: Implications for regulatory reform

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  • Goh, Kim Huat
  • See, Kok Fong

Abstract

We apply the bootstrap Malmquist-Luenberger productivity index (MLPI) to measure the total factor productivity (TFP) growth for 14 water operators in Malaysia during the years 2000–2017. The analysis confirms that Malaysia's water sector experienced a deterioration in average productivity of 1.21% per year, attributed mainly to technological regression. Before the regulatory reform, the average productivity of water operators improved and was positively influenced by efficiency change. After the reform, the water operators suffered a decline in TFP growth due to decreased efficiency and technical change. The inefficient utilization of capital expenditure and aging water infrastructure are possible reasons for this effect. Regulatory reform is necessary but insufficient to improve the productivity growth of Malaysia's water sector.

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  • Goh, Kim Huat & See, Kok Fong, 2021. "Measuring the productivity growth of Malaysia's water sector: Implications for regulatory reform," Utilities Policy, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:juipol:v:71:y:2021:i:c:s0957178721000321
    DOI: 10.1016/j.jup.2021.101198
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    2. Wasi Ul Hassan Shah & Yuting Lu & Gang Hao & Hong Yan & Rizwana Yasmeen, 2022. "Impact of “Three Red Lines” Water Policy (2011) on Water Usage Efficiency, Production Technology Heterogeneity, and Determinant of Water Productivity Change in China," IJERPH, MDPI, vol. 19(24), pages 1-23, December.
    3. Goh, Kim Huat & See, Kok Fong, 2023. "Incorporating nonrevenue water in the efficiency assessment of water supply utilities: A parametric enhanced hyperbolic distance function," Utilities Policy, Elsevier, vol. 81(C).
    4. Maziotis, Alexandros & Molinos-Senante, Maria, 2022. "The impact of model specification and environmental variables on measuring the overall technical efficiency of water and sewerage services: Evidence from Chile," Structural Change and Economic Dynamics, Elsevier, vol. 61(C), pages 191-198.

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