Regulatory Independence and Political Interference: Evidence from EU Mixed-Ownership Utilities’ Investment and Debt

Carlo Cambini and Laura Rondi
Additional contact information
Carlo Cambini: Politecnico di Torino, IMT Lucca and FEEM

No 2010.69, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This paper examines the investment and financial decisions of a sample of 92 EU regulated utilities, taking into account key institutional features of EU public utilities, such as: a) regulation by agencies with various degrees of independence; b) partial ownership of the state in the regulated firm; and c) the government’s political orientation, which may ultimately influence the regulatory climate to be either more pro-firm or more pro-consumers. Our results show that regulatory independence matters for both investment and financial decisions. Investment increases under an Independent Regulatory Agency (IRA), while ownership has no effect. Leverage also increases when the IRA is in place, especially so if the regulated firm is privately controlled. Finally political orientation does matter, as firm investment increases under more conservative (pro-firm) governments, but this effect appears to revert when the IRA is in place.

Keywords: Regulated Utilities; Investment; Capital Structure; Private and State Ownership; Regulatory Independence; overnment’s Political Orientation (search for similar items in EconPapers)
JEL-codes: G31 G32 L33 L51 L90 (search for similar items in EconPapers)
Date: 2010-06
New Economics Papers: this item is included in nep-ene, nep-eur, nep-pbe, nep-pol and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://feem-media.s3.eu-central-1.amazonaws.com/w ... oads/NDL2010-069.pdf (application/pdf)

Related works:
Working Paper: Regulatory Independence and Political Interference: Evidence from EU Mixed-Ownership Utilities’ Investment and Debt (2010)
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:fem:femwpa:2010.69

Access Statistics for this paper

More papers in Working Papers from Fondazione Eni Enrico Mattei Contact information at EDIRC.
Bibliographic data for series maintained by Alberto Prina Cerai ( this e-mail address is bad, please contact ).