The Impact of the Regulatory Reform Process on the R&D Investment of European Electricity Utilities

Schmitt Stephan () and Kucsera Denes
Additional contact information
Schmitt Stephan: wik-Consult GmbH, Rhoendorfer Str. 68, 53604 Bad Honnef, Germany Research Institute for Regulatory Economics, Vienna University of Economics and Business, Vienna, Austria
Kucsera Denes: Agenda Austria, Schottengasse 1/3, 1010 Vienna, Austria

Review of Network Economics, 2014, vol. 13, issue 1, 35-67

Abstract: The aim of this paper is to provide deeper insights into the impact of regulatory reforms and privatization on the R&D spending of electricity utilities. Building on a novel panel data set including the biggest European utilities from eight EU countries over a period from 1985 to 2010, we find that the overall influence of the European regulatory reform process on R&D investment is ambiguous. The empirical evidence indicates that the approaching liberalization process, i.e., nearing competition, has a dampening effect on R&D spending. Utilities reduce their expenses due to increased uncertainties and additional risks. However, once the market and regulatory framework conditions have been set up and firms have become used to the new situation, higher levels of competition positively influence R&D and former incumbents invest more in order to “escape” from the competition. Moreover, we find no indication that (ownership) unbundling and incentive regulation directly affect the research expenditures of the utilities. In contrast, the privatization of utilities seems to have strong negative consequences for their amount of R&D spending.

Keywords: competition; electricity sector; liberalization; privatization; R&D spending; regulatory reforms (search for similar items in EconPapers)
JEL-codes: L43 L51 L94 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/rne-2012-0021 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

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:bpj:rneart:v:13:y:2014:i:1:p:35-67:n:3

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/rne/html

DOI: 10.1515/rne-2012-0021

Access Statistics for this article

Review of Network Economics is currently edited by Lukasz Grzybowski

More articles in Review of Network Economics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().