The Distributional Efficiency of Alternative Regulatory Regimes: A Real Option Approach
AbstractThis paper studies the effects of regulatory constraints on firm's irreversible investment decisions. The RPI - x rule is compared to a profit sharing rule, which increases the x factor in case profits go beyond a given level. When the firm has an option to delay investment, these rules have the same impact on investment choices. As profit sharing has a greater ability to extract rents, however, it is more efficient than the RPI - x rule. Copyright 2003 by Kluwer Academic Publishers
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Bibliographic InfoArticle provided by Springer in its journal International Tax and Public Finance.
Volume (Year): 10 (2003)
Issue (Month): 4 (August)
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Web page: http://www.springerlink.com/link.asp?id=102915
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- Michele Moretto & Paolo Panteghini & Carlo Scarpa, 2003.
"Investment Size and Firm's Value under Profit Sharing Regulation,"
CESifo Working Paper Series
1040, CESifo Group Munich.
- Michele Moretto & Paolo M. Panteghini & Carlo Scarpa, 2003. "Investment Size and Firm’s Value Under Profit Sharing Regulation," Working Papers 2003.80, Fondazione Eni Enrico Mattei.
- Michele Moretto & Paolo M. Panteghini & Carlo Scarpa, 2006.
"Profit Sharing and Investment by Regulated Utilities: A Welfare Analysis,"
ubs0611, University of Brescia, Department of Economics.
- Moretto, Michele & Panteghini, Paolo M. & Scarpa, Carlo, 2008. "Profit sharing and investment by regulated utilities: A welfare analysis," Review of Financial Economics, Elsevier, vol. 17(4), pages 315-337, December.
- Michele Moretto & Paolo M. Panteghini & Carlo Scarpa, 2007. "Profit Sharing and Investment by Regulated Utilities: a Welfare Analysis," "Marco Fanno" Working Papers 0059, Dipartimento di Scienze Economiche "Marco Fanno".
- Stroffolini, Francesca, 2012. "Access profit-sharing regulation with information acquisition and transmission," Research in Economics, Elsevier, vol. 66(2), pages 161-174.
- Paolo M. Panteghini & Carlo Scarpa, 2003. "Irreversible Investments and Regulatory Risk," CESifo Working Paper Series 934, CESifo Group Munich.
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