IDEAS home Printed from https://ideas.repec.org/a/eee/juipol/v19y2011i3p134-141.html
   My bibliography  Save this article

An econometric analysis of private sector participation in China’s urban water supply

Author

Listed:
  • Wang, Hongwei
  • Wu, Wenqing
  • Zheng, Shilin

Abstract

This paper explores the impact of private sector participation on industrial performance of urban water supply by using panel data for 35 major cities in China over the period 1998 to 2008. We find that the introduction of private sector participation is significantly correlated with improvement in integrated production capacity and water coverage rate, but not correlated with the investment in fixed assets. Private sector participation has a positive impact on the integrated production capacity in the developed eastern cities and contributes to narrowing the gap of water coverage rate between the less developed central and western cities and the more developed eastern cities. We also find that the participation of foreign companies, but not domestic private companies, significantly improves water industry performance. The research sheds some light on the importance of private participation in urban water markets. However, the performance of domestic private firms in urban water supply still needs be improved.

Suggested Citation

  • Wang, Hongwei & Wu, Wenqing & Zheng, Shilin, 2011. "An econometric analysis of private sector participation in China’s urban water supply," Utilities Policy, Elsevier, vol. 19(3), pages 134-141.
    • Handle: RePEc:eee:juipol:v:19:y:2011:i:3:p:134-141
    DOI: 10.1016/j.jup.2011.01.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0957178711000063
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jup.2011.01.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Antonio Estache & MartÌn A. Rossi, 2002. "How Different Is the Efficiency of Public and Private Water Companies in Asia?," The World Bank Economic Review, World Bank, vol. 16(1), pages 139-148, June.
    2. Krueger, Anne O, 1990. "Government Failures in Development," Journal of Economic Perspectives, American Economic Association, vol. 4(3), pages 9-23, Summer.
    3. Claude Crampes & Antonio Estache, 1996. "Regulating Water Concessions : Lessons from the Buenos Aires concession," World Bank Publications - Reports 11610, The World Bank Group.
    4. Estache, Antonio & Gomez-Lobo, Andres & Leipziger, Danny, 2001. "Utilities Privatization and the Poor: Lessons and Evidence from Latin America," World Development, Elsevier, vol. 29(7), pages 1179-1198, July.
    5. George R.G. Clarke & Katrina Kosec & Scott Wallsten, 2009. "Has private participation in water and sewerage improved coverage? Empirical evidence from Latin America," Journal of International Development, John Wiley & Sons, Ltd., vol. 21(3), pages 327-361.
    6. Sebastian Galiani & Paul Gertler & Ernesto Schargrodsky, 2005. "Water for Life: The Impact of the Privatization of Water Services on Child Mortality," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 83-120, February.
    7. Colin Kirkpatrick & David Parker & Yin-Fang Zhang, 2006. "An Empirical Analysis of State and Private-Sector Provision of Water Services in Africa," The World Bank Economic Review, World Bank, vol. 20(1), pages 143-163.
    8. Estache, Antonio & Kouassi, Eugene, 2002. "Sector organization, governance, and the inefficiency of African water utilities," Policy Research Working Paper Series 2890, The World Bank.
    9. Heckman, James J, 1978. "Dummy Endogenous Variables in a Simultaneous Equation System," Econometrica, Econometric Society, vol. 46(4), pages 931-959, July.
    10. Colin Kirkpatrick & David Parker, 2005. "Domestic Regulation and the WTO: The Case of Water Services in Developing Countries," The World Economy, Wiley Blackwell, vol. 28(10), pages 1491-1508, October.
    11. Kornai, Janos & Weibull, Jorgen W., 1983. "Paternalism, buyers' and sellers' market," Mathematical Social Sciences, Elsevier, vol. 6(2), pages 153-169, November.
    12. Donald, Stephen G & Sappington, David E M, 1997. "Choosing among Regulatory Options in the United States Telecommunications Industry," Journal of Regulatory Economics, Springer, vol. 12(3), pages 227-243, November.
    13. Ros, Agustin J, 1999. "Does Ownership or Competition Matter? The Effects of Telecommunications Reform on Network Expansion and Efficiency," Journal of Regulatory Economics, Springer, vol. 15(1), pages 65-92, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Li, Li, 2018. "Private sector participation and performance of county water utilities in China," China Economic Review, Elsevier, vol. 52(C), pages 30-53.
    2. Ouda, Omar K.M. & Al-Waked, Rafat F. & Alshehri, Abdulrahman A., 2014. "Privatization of water-supply services in Saudi Arabia: A unique experience," Utilities Policy, Elsevier, vol. 31(C), pages 107-113.
    3. Jinjin Zhao, 2020. "Productivity change in the privatized water sector in China (1999–2006)," Journal of Productivity Analysis, Springer, vol. 53(2), pages 227-241, April.
    4. Antonio Estache & Caroline Philippe, 2012. "The Impact of Private Participation in Infrastructure in Developing Countries: Taking Stock of about 20 Years of Experience," Working Papers ECARES ECARES 2012-043, ULB -- Universite Libre de Bruxelles.
    5. Vu, Khuong & Hartley, Kris, 2022. "Effects of digital transformation on electricity sector growth and productivity: A study of thirteen industrialized economies," Utilities Policy, Elsevier, vol. 74(C).
    6. Li, Fan & Phillips, Michelle, 2016. "The Influence Of Regulation And The Operational Environment On Chinese Urban Water Utilities," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235160, Agricultural and Applied Economics Association.
    7. Fan Li & Michelle Andrea Phillips, 2017. "The Influence of the Regulatory Environment on Chinese Urban Water Utilities," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 31(1), pages 205-218, January.
    8. Wang, Manyu & Huang, Ying & An, Zidong & Wei, Chu, 2023. "Reforming the world's largest heating system: Quasi-experimental evidence from China," Energy Economics, Elsevier, vol. 117(C).
    9. Reza, Rajibur & Tularam, Gurudeo Anand & Li, Bin, 2021. "A review of global research on private investment in the water sector," Utilities Policy, Elsevier, vol. 72(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Antonio Estache & L. Wren-Lewis, 2008. "Towards a Theory of Regulation for Developing Countries: Following Laffont's Lead," Working Papers ECARES 2008_018, ULB -- Universite Libre de Bruxelles.
    2. Kirkpatrick, Colin & Parker, David, 2004. "Regulation and the Privatisation of Water Services in Developing Countries: Assessing the Impact of the General Agreement on Trade in Services (GATS)," Centre on Regulation and Competition (CRC) Working papers 30600, University of Manchester, Institute for Development Policy and Management (IDPM).
    3. Lee, Cassey, 2011. "Privatization, water access and affordability: Evidence from Malaysian household expenditure data," Economic Modelling, Elsevier, vol. 28(5), pages 2121-2128, September.
    4. Estache, Antonio & Goicoechea, Ana & Trujillo, Lourdes, 2009. "Utilities reforms and corruption in developing countries," Utilities Policy, Elsevier, vol. 17(2), pages 191-202, June.
    5. Li, Li, 2018. "Private sector participation and performance of county water utilities in China," China Economic Review, Elsevier, vol. 52(C), pages 30-53.
    6. Sabbioni, Guillermo, 2008. "Efficiency in the Brazilian sanitation sector," Utilities Policy, Elsevier, vol. 16(1), pages 11-20, March.
    7. Philippe Marin, 2009. "Public-Private Partnerships for Urban Water Utilities : A Review of Experiences in Developing Countries," World Bank Publications - Books, The World Bank Group, number 2703, December.
    8. Marta Suárez-Varela & María los Ángeles García-Valiñas & Francisco González-Gómez & Andrés J Picazo-Tadeo, 2017. "Ownership and Performance in Water Services Revisited: Does Private Management Really Outperform Public?," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 31(8), pages 2355-2373, June.
    9. Walter, Matthias & Cullmann, Astrid & von Hirschhausen, Christian & Wand, Robert & Zschille, Michael, 2009. "Quo vadis efficiency analysis of water distribution? A comparative literature review," Utilities Policy, Elsevier, vol. 17(3-4), pages 225-232, September.
    10. Lin, Chen, 2005. "Service quality and prospects for benchmarking: Evidence from the Peru water sector," Utilities Policy, Elsevier, vol. 13(3), pages 230-239, September.
    11. David Parker & Colin Kirkpatrick, 2005. "Privatisation in Developing Countries: A Review of the Evidence and the Policy Lessons," Journal of Development Studies, Taylor & Francis Journals, vol. 41(4), pages 513-541.
    12. Estrin, Saul & Pelletier, Adeline, 2016. "Privatisation in Developing Countries: What Are the Lessons of Recent Experience?," IZA Discussion Papers 10297, Institute of Labor Economics (IZA).
    13. Marcela Meléndez & Andrés Gómez-Lobo Echeñique, 2007. "Social Policy, Regulation and Private Sector water supply: the case of Colombia," Working Papers wp252, University of Chile, Department of Economics.
    14. Dethier, Jean-Jacques & Moore, Alexander, 2012. "Infrastructure in developing countries: An overview of some economic issues," Discussion Papers 123305, University of Bonn, Center for Development Research (ZEF).
    15. Kosec, Katrina, 2013. "The child health implications of privatizing Africa’s urban water supply:," IFPRI discussion papers 1269, International Food Policy Research Institute (IFPRI).
    16. Estrin, Saul & Pelletier, Adeline, 2018. "Privatization in developing countries: what are the lessons of recent experience?," LSE Research Online Documents on Economics 87348, London School of Economics and Political Science, LSE Library.
    17. Xun Wu & Nepomuceno A. Malaluan, 2008. "A Tale of Two Concessionaires: A Natural Experiment of Water Privatisation in Metro Manila," Urban Studies, Urban Studies Journal Limited, vol. 45(1), pages 207-229, January.
    18. Parker, David & Kirkpatrick, Colin & Figueira-Theodorakopoulou, Catarina, 2008. "Infrastructure regulation and poverty reduction in developing countries: A review of the evidence and a research agenda," The Quarterly Review of Economics and Finance, Elsevier, vol. 48(2), pages 177-188, May.
    19. Chen Lin & Sanford Berg, 2008. "Incorporating Service Quality into Yardstick Regulation: An Application to the Peru Water Sector," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 32(1), pages 53-75, February.
    20. Alexandr Akimov & Paul Simshauser, 2018. "Performance measurement in Australian water utilities: Current state and future directions," Discussion Papers in Finance finance:201802, Griffith University, Department of Accounting, Finance and Economics.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:juipol:v:19:y:2011:i:3:p:134-141. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.sciencedirect.com/journal/utilities-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.