Are banks public utilities? Evidence from Europe

The regulatory response to the global financial crisis has been to instal a myriad of new rules in order to improve bank capital and liquidity, as well as to reduce systemic risks through structural reform. All these new rules place a straightjacket around banker’s activities and inhibit their operational freedom. This new environment has made European banks look less like private free-wheeling profit-maximising firms and more like public utilities. The utility services banks provide to society means that they should be overseen even more heavily. This includes greater regulatory oversight of bank pricing, profitability and service provision.     

百色市水务一体化管理研究

城市水务系统为工业生产和居民提供用水,是城市最重要的基础设施。城市供水与工业发展和居民生活质量的提高息息相关,如何理顺城市水务管理体制,降低供水成本,推动城镇化进程,为经济社会发展注入动力,是值得研究的重要课题。文章通过对具体案例进行分析,探索城市水务一体化管理的思路。     

城市公用事业推行民营化的探讨

在对我国城市公用事业现状调查分析的基础上，指出了城市公用事业存在的问题，并从转变政府职能和经济城市的角度思考城市公用事业的发展出路，提出民营化是今后城市公用事业的发展方向，然后，系统地对城市公用事业推行民营化的概念，必要性、实施要领和存在的障碍进行了探讨。     

Bureaucracy,economic regulation,and the incentive limits of the firm

This paper uses a transactions cost perspective to examine the development of organizational tendencies that plague the governance of unregulated subsidiaries by regulated parent companies. By focussing on what Williamson (1985) calls the ‘incentive limits’ of firms, conditions that should exacerbate the problems facing these firms as they diversify are identified. Empirical testing of hypotheses drawn from this discussion is conducted using a sample of nonutility, nonregulated subsidiaries of 54 electric utilities. The analysis, using both linear regression and event history methods, confirms the connection between the characteristics of the regulated parent company and subsidiary performance. The paper concludes with a discussion of how further research might extend the state of knowledge on the topic of the economic losses of bureaucracy.     

我国公用事业的改革与发展

分析了中国公用事业发展模式及其转变历程,指出了当前公用事业产品供给存在的问题:产品定价偏低、价格严重偏离成本、经营单位亏损经营、财政补贴沉重;公用企事业自身运营和发展直接受制于政府部门,形成所谓的吃财政"大锅饭",缺乏自主权和积极性;行业垄断导致公用事业产品提供单位处于无竞争的环境中,外无压力内无动力导致生产效率低、服务意识差;缺乏稳定、规范的建设资金来源。     

Two-persons efficient risk-sharing and equilibria for concave law-invariant utilities

Efficient risk-sharing rules and equilibria between two agents with utilities in a class that contains the rank dependent expected utility (RDU) are fully characterized. Specific attention is given to the RDU. Call-spreads and contracts with mixed regimes are shown to be efficient. Closed-form solutions are obtained for several examples.      

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

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. This study was initiated while Val Tsaplin was a PURC Visiting Scholar with funding from the FSA Contemporary Issues Fellowship Program. Michael Pollitt, David Sappington, Fernando Damonte, and an unknown reviewer provided very helpful comments on earlier drafts. We thank Patricia Mason for copy-editing the paper. The conclusions do not necessarily represent the views of organizations with which the researchers are affiliated.     

Price Squeezes in a Regulatory Environment

This paper analyzes the relevance and the scope of price squeeze tests in a regulatory environment. We distinguish between three types of ex ante regulation (full, partial or no regulation) to identify regulatory squeezes, predatory squeezes, and squeezes as foreclosure. We argue that policy makers should (i) use price squeeze tests as an ex post instrument, compatible with the ex ante regulatory environment, and (ii) focus on predatory price squeezes. We propose a predatory squeeze test that respects regulatory choices that have been made previously, in contrast with the earlier proposed tests. We extend our framework to ask at which aggregation level predatory price squeeze tests ought to be applied, a much-debated issue in telecommunications.JEL Classification: L40, L51, L97Jan Bouckaert acknowledges the financial support from the University of Antwerp (NOI2003). Frank Verboven acknowledges financial support from the Belgian Science Foundation-Flanders. We are grateful to two anonymous referees and the Editor for their helpful remarks. We also thank conference and seminar participants at CEFIR (Moscow), CPB (The Hague), the University of Antwerp, and Massimo Motta, Walter Nonneman, Wilfried Pauwels, and Tomasso Valletti for very useful comments.     

Cost efficiency of Slovenian water distribution utilities: an application of stochastic frontier methods

This study estimates cost inefficiency and economies of scale of Slovenian water distribution utilities over the 1997–2003 period by employing several different stochastic frontier methods. The results indicate that significant cost inefficiencies are present in the utilities. An introduction of incentive-based price regulation scheme might help resolve this problem. However, the inefficiency scores obtained from different cost frontier models are not found to be robust. The levels of inefficiency estimates as well as the rankings depend on the econometric specification of the model. The established lack of robustness can be at least partly explained by different ability of the models to separate unobserved heterogeneity from inefficiency. Newly proposed true fixed effects model (Greene, J Econom 126:269–303, 2005; J Prod Anal 23(1):7–32, 2005) appears to perform better than the conventional panel data models with respect to distinguishing between unobserved heterogeneity and inefficiency. On the other hand, different models produce fairly robust results with respect to estimates of economies of output density, customer density and economies of scale. The optimal size of a company is found to closely corresponds to the sample median. Economies of scale are found in small-sized utilities, while large companies exhibit diseconomies of scale.

Mergers and acquisitions as a response to the deregulation of the electric power industry: value creation or value destruction?

Many electric utilities, as a response to the deregulation of the electric power industry, adopted a strategy of acquiring other electric or gas utilities. We examine whether these merger and acquisition strategies create value for the utility shareholders and whether the strategies result in superior post-merger operating and stock-price performance relative to utilities that did not grow through acquisitions. We find little evidence that the mergers and acquisitions created long-term value for a fully diversified investor. Furthermore, the stock price and operating performance of the acquirers under performed the stock price and operating performance of a control portfolio of utilities that did not engage in merger activity.