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

Journal of Regulatory Economics, Vol. 28, No. 3, pp. 259-87

28 Pages Posted: 5 Feb 2008 Last revised: 26 Aug 2009

See all articles by Sanford V. Berg

Sanford V. Berg

University of Florida - Department of Economics

Chen Lin

The University of Hong Kong - Faculty of Business and Economics

Valeriy Tsaplin

affiliation not provided to SSRN

Date Written: November 2005

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.

Keywords: Incentive regulation, state-owned and privatized utilities, Data Envelopment Analysis

Suggested Citation

Berg, Sanford V. and Lin, Chen and Tsaplin, Valeriy, Regulation of State-Owned and Privatized Utilities: Ukraine Electricity Distribution Company Performance (November 2005). Journal of Regulatory Economics, Vol. 28, No. 3, pp. 259-87. Available at SSRN: https://ssrn.com/abstract=1089425

Sanford V. Berg (Contact Author)

University of Florida - Department of Economics ( email )

Gainesville, FL 32611-7140
United States
352-392-0132 (Phone)
352-392-7796 (Fax)

HOME PAGE: http://www.cba.ufl.edu/purc/facultyinfo.asp?WEBID=1260

Chen Lin

The University of Hong Kong - Faculty of Business and Economics ( email )

Pokfulam Road
Hong Kong
China

Valeriy Tsaplin

affiliation not provided to SSRN ( email )

No Address Available

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