Paying Returns to Shareholders of Water Utilities: Evidence from Italy

Giulia Romano and Andrea Guerrini
Additional contact information
Andrea Guerrini: Department of Business Administration, University of Verona, 37129 Verona, Italy

Sustainability, 2019, vol. 11, issue 7, 1-12

Abstract: The debate about the role of corporations with regard to water also involves the influence that paying returns to shareholders could have on the investment policy of utilities, influencing the development of new infrastructure or the renewal of existing ones. This study investigated the dividend policy of water utilities by analyzing the data of 128 Italian firms during 2009–2014. Data show that the majority of utilities do not distribute any return to shareholders. On average, large utilities pay more frequent returns than medium-sized and small ones. Moreover, water utilities that are part of a group, multi-utilities, and those located in the center of Italy pay more frequent returns than do others. Southern firms usually do not pay returns. As expected, privately owned water utilities pay dividends more frequently and have higher returns to equity. In all the observed years, at least one-third of such utilities paid returns. Empirical results provide water regulators, water utility managers, and stakeholders with information that can impact future regulatory and managerial decisions related to management and strategic model choices in the water industry and how these decisions affect investments to improve water quality, water quantity, and/or water services.

Keywords: dividend policy; Italy; returns; water utility (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://www.mdpi.com/2071-1050/11/7/2033/pdf (application/pdf)
https://www.mdpi.com/2071-1050/11/7/2033/ (text/html)

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:gam:jsusta:v:11:y:2019:i:7:p:2033-:d:220283

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().