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Efficiency in the Consolidation of the Italian Water Sector

Author

Listed:
  • Graziano Abrate

    (Università del Piemonte Orientale
    Hermes Research Center)

  • Clementina Bruno

    (Università del Piemonte Orientale
    Hermes Research Center)

  • Fabrizio Erbetta

    (Università del Piemonte Orientale
    Hermes Research Center)

  • Giovanni Fraquelli

    (Università del Piemonte Orientale
    Hermes Research Center
    IRCRES - CNR)

  • Anna Giolitti

    (Hermes Research Center)

Abstract

Despite since the mid-90s the regulation has encouraged horizontal and vertical bundling, the Italian water and sewerage industry is still largely fragmented. This work investigates the potential benefits of the process of consolidation, relying on realistic ex-ante merger hypotheses. A parametric methodology is used to implement the Bogetoft and Wang 2005’s decomposition of potential gains from mergers (J Prod Anal 23:145–171). When looking at strictly technological aspects, results do not provide univocal evidence in favor or against merger strategies, recommending a case-by-case approach in evaluating real merger projects. Moreover, the largest potential gains are due to managerial rather than technological inefficiency, thus their effective ex-post attainment ultimately depend on the ability to tackle the change and on political will.

Suggested Citation

  • Graziano Abrate & Clementina Bruno & Fabrizio Erbetta & Giovanni Fraquelli & Anna Giolitti, 2017. "Efficiency in the Consolidation of the Italian Water Sector," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 31(8), pages 2447-2463, June.
    • Handle: RePEc:spr:waterr:v:31:y:2017:i:8:d:10.1007_s11269-016-1376-9
    DOI: 10.1007/s11269-016-1376-9
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    References listed on IDEAS

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    Cited by:

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    2. Arocena, Pablo & Saal, David S. & Urakami, Takuya & Zschille, Michael, 2020. "Measuring and decomposing productivity change in the presence of mergers," European Journal of Operational Research, Elsevier, vol. 282(1), pages 319-333.
    3. Massarutto, Antonio & Grassetti, Luca & Lambardi di San Miniato, Michele & Moletta, Mattia, 2023. "Efficient firms are all alike, but every inefficient firm is such in its own way: Heterogeneity of costs determinants in the Italian water sector," Utilities Policy, Elsevier, vol. 84(C).
    4. Anna Bottasso & Maurizio Conti, 2021. "Economie di integrazione verticale ed economie di scopo nel settore idrico e fognario: alcune considerazioni alla luce dell?evidenza empirica internazionale," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2021(3), pages 89-128.

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