The Influence of the Regulatory Environment on Chinese Urban Water Utilities

Fan Li () and Michelle Phillips
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Fan Li: Shenzhen University

Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), 2017, vol. 31, issue 1, No 14, 205-218

Abstract: Abstract China is currently facing water scarcity issues, which can partially be relieved with improvements in efficiency in its urban water supply sector. Using a manually collected utility-level dataset for 2009–13, we examine the performance of Chinese urban water utilities, taking into account their regulatory environment. Our main findings are that: (1) an increase in the number of non-technical staff does not increase output levels, while an increase in the number of technical staff, length of pipe or electricity usage can increase output; (2) customer density and non-household user rates are associated with lower levels of inefficiency (or higher levels of measured efficiency), while outsourcing staff rate, non-revenue water rate, and average piped water pressure do not significantly affect efficiency. These results suggest that Chinese urban water utilities can be improved through performance-based regulation and incentives that take into account environmental factors of utilities.

Keywords: Chinese water utilities; Stochastic frontier analysis; Regulatory environment; Performance; L51; L95; L980 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/s11269-016-1519-z

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