Regulation of State-Owned and Privatized Utilities: Ukraine Electricity Distribution Company Performance
AbstractBoth ownership and regulation affect the behavior of utility managers. Private ownership rewards managerial decisions that enhance shareholder value. Regulatory incentives reward behavior that affects profits and costs. An empirical analysis of 24 Ukraine electricity distribution companies from 1998 to 2002 indicates that privately owned firms do respond to incentives that add to net cash flows (associated with reducing commercial and non-commercial network losses). However, they also respond more aggressively than do state-owned distribution utilities to mark-up (cost-plus) regulatory incentives that increase shareholder value but decrease cost efficiency. Copyright Springer Science+Business Media, Inc. 2005
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Bibliographic InfoArticle provided by Springer in its journal Journal of Regulatory Economics.
Volume (Year): 28 (2005)
Issue (Month): 3 (November)
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Web page: http://www.springerlink.com/link.asp?id=100298
data envelopment analysis (DEA) and stochastic frontier analysis (SFA); incentive regulation; state-owned and privatized utilities;
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