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A capability perspective on performance deficiencies in utility firms

  • Worch, Hagen
  • Truffer, Bernhard
  • Kabinga, Mundia
  • Eberhard, Anton
  • Markard, Jochen
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    This paper proposes a capability-based framework to explain performance deficiencies in utility firms as a result of policy and regulatory changes. The framework complements conventional explanations such as transaction cost and agency approaches, which suggest that appropriate incentives and regulations increase the performance of public utilities after relatively short adaptation processes. In contrast, we argue that capability gaps – understood as an inadequate availability of competences, skills and experiences – tend to have long-lasting effects on firm performance. A crucial implication of the capability perspective is that regulatory interventions that create capability gaps at the firm level may affect utility performance – and the ability of infrastructure sectors to provide adequate services – more severely than expected by traditional approaches.

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    Article provided by Elsevier in its journal Utilities Policy.

    Volume (Year): 25 (2013)
    Issue (Month): C ()
    Pages: 1-9

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    Handle: RePEc:eee:juipol:v:25:y:2013:i:c:p:1-9
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    15. repec:hal:journl:halshs-00624266 is not listed on IDEAS
    16. Markard, Jochen & Truffer, Bernhard, 2006. "Innovation processes in large technical systems: Market liberalization as a driver for radical change?," Research Policy, Elsevier, vol. 35(5), pages 609-625, June.
    17. Guthrie, Graeme, 2006. "Regulating Infrastructure: The Impact on Risk and Investment," Working Paper Series 3851, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
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