Investigating the Key Factors Influencing the Profitability of Romanian Public Water Supply and Sewerage Services

Kamer-Ainur Aivaz, Dorin Jula, Octavia Moise, George Banghiore, Diane Paula Corina Vancea and Andreea Simona Saseanu ()
Additional contact information
Kamer-Ainur Aivaz: Ovidius University of Constanta, Constanta, Romania
Dorin Jula: Institute of Economic Forecasting, Romanian Academy, Ecological University, Bucharest, Romania
Octavia Moise: Romanian Academy, School of Advanced Studies of the Romanian Academy, Doctoral School of Economics of the National Institute of Economic Research Constantin C. Kiri?escu, Bucharest, Romania
George Banghiore: Romanian Academy, School of Advanced Studies of the Romanian Academy, Doctoral School of Economics of the National Institute of Economic Research Constantin C. Kiri?escu, Bucharest, Romania
Diane Paula Corina Vancea: Ovidius University of Constanta, Constanta, Romania
Andreea Simona Saseanu: Bucharest University of Economic Studies, Romania

The AMFITEATRU ECONOMIC journal, 2025, vol. 27, issue 70, 1209

Abstract: This paper explores the dynamics of the public water supply and sewerage service in Romania, focusing on the relationships between different operational, commercial and financial variables and their impact on the operating profit rate. The aim of the paper is to analyze the interactions, both in the short and in the long term, between these economic variables, using an advanced econometric methodology, by applying the ARDL (Autoregressive Distributed Lag) model. The analysis was carried out on a dataset of 11 annual cycles, allowing to assess the stability and dynamics of the relationships studied. The results indicate a positive correlation between water infrastructure expansion and the rate of profit, suggesting that investments in network length can contribute to the economic growth of the sector. In contrast, tariff increases showed a long-term negative impact on the profit rate, reflecting consumers' sensitivity to price changes. Efficient management of non-revenue water and damage reduction were also found to be key to improve financial performance and increase sustainability. The paper provides an in-depth understanding of market mechanisms and can support the development of more effective public policies for water resource management in the context of current socio-economic and environmental challenges.

Keywords: water supply management; profitability; PMG/ARDL modeling; tariff impact; infrastructure; sustainability (search for similar items in EconPapers)
JEL-codes: C19 D49 E21 H41 Q25 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.amfiteatrueconomic.ro/temp/Article_3469.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aes:amfeco:v:27:y:2025:i:70:p:1209

Access Statistics for this article

More articles in The AMFITEATRU ECONOMIC journal from Academy of Economic Studies - Bucharest, Romania Contact information at EDIRC.
Bibliographic data for series maintained by Valentin Dumitru ().