Regulation of State-Owned and Privatized Utilities: Ukraine Electricity Distribution Company Performance*

Sanford Berg, Chen Lin and Valeriy Tsaplin ()

Journal of Regulatory Economics, 2005, vol. 28, issue 3, 259-287

Abstract: Both ownership and regulation affect the behavior of utility managers. Private ownership rewards managerial decisions that enhance shareholder value. Regulatory incentives reward behavior that affects profits and costs. An empirical analysis of 24 Ukraine electricity distribution companies from 1998 to 2002 indicates that privately owned firms do respond to incentives that add to net cash flows (associated with reducing commercial and non-commercial network losses). However, they also respond more aggressively than do state-owned distribution utilities to mark-up (cost-plus) regulatory incentives that increase shareholder value but decrease cost efficiency. Copyright Springer Science+Business Media, Inc. 2005

Keywords: data envelopment analysis (DEA) and stochastic frontier analysis (SFA); incentive regulation; state-owned and privatized utilities (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (38)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:regeco:v:28:y:2005:i:3:p:259-287

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DOI: 10.1007/s11149-005-3957-z

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