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Nonmarket performance: Evidence from U.S. electric utilities

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  • Bonardi, Jean-Philippe
  • Holburn, Guy
  • Vanden Bergh, Rick

Abstract

Building on a framework that assesses the attractiveness of ‘political markets’ – where firms transact over public policies with government policy-makers – we develop hypotheses regarding the success or performance of firms’ nonmarket strategies. We propose that the ability of firms to gain more favorable policy outcomes is increasing in the degree of rivalry among elected politicians; the firm’s recent experience with policy-makers; and the opportunity to learn from other firms’ recent experiences; and is decreasing in the degree of rivalry from competing interest groups and the resource base of regulatory agencies. Using data on regulatory filings for rate increases made by the population of U.S. privately-owned electric utilities over a 13 year period, we find empirical support for our arguments.

Suggested Citation

  • Bonardi, Jean-Philippe & Holburn, Guy & Vanden Bergh, Rick, 2006. "Nonmarket performance: Evidence from U.S. electric utilities," MPRA Paper 14437, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:14437
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    References listed on IDEAS

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    More about this item

    Keywords

    Nonmarket strategy; lobbying; Electric utilities;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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