 Objectives and incentives: Evidence from the privatization of Great Britain’s power plantsThomas Triebs and Michael Pollitt International Journal of Industrial Organization, 2019, vol. 65, issue C, 1-29 Abstract: Does privatization increase plant productivity because the private owner’s objective is different, or because they are better able to control management? And, is privatization sufficient to improve productivity, or is it only effective in combination with competition? We answer these questions using the quasi-experiment of Great Britain’s electricity industry privatization. To separate the effect of a change in objectives from a change in incentives we assume, that the former only affects labor but not fuel productivity. And, assuming that effective competition was only introduced after privatization, we are able to separately identify the effects of privatization and competition. We find that privatization increased labor but not fuel productivity: evidence for the importance of objectives. There is no evidence that the introduction of effective competition after privatization increased labor or fuel productivity: evidence that privatization increases productivity by itself. Keywords: Privatization; Competition; Productivity; Electricity generation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:65:y:2019:i:c:p:1-29 DOI: 10.1016/j.ijindorg.2018.12.003 Access Statistics for this article International Journal of Industrial Organization is currently edited by P. Bajari, B. Caillaud and N. Gandal More articles in International Journal of Industrial Organization from Elsevier |
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