Electricity Regulation in Brazil: Institutional Development and Regulatory Risks

16 Pages Posted: 8 Mar 2022

See all articles by José Savoia

José Savoia

FEA-USP

Renata Wandroski Peris

Universidade de São Paulo

André Castro Carvalho

affiliation not provided to SSRN

Eduardo Rosário Contani

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper

Abstract

This study discusses regulatory agencies' development in Brazil in response to prior privatization. It highlights a case study of government officials' regulatory intervention in the electricity sector, which exposed the business environment to long-lasting regulatory risks. We empirically tested the impact of Provisional Measure 579/2012, which settled rules benefiting electricity consumers and reduced concessionaries' revenues. We provide a sample of 25 electricity companies and analyze differences in returns and systematic risks. Our results show a significant increase in systematic risk and equity cost and a reduction in stock returns even in other infrastructure sectors, evidencing contagion.

Keywords: Regulatory capture, Systematic Risk, Electricity sector

Suggested Citation

Ferreira Savoia, Jose Roberto and Wandroski Peris, Renata and Carvalho, André Castro and Contani, Eduardo Rosário, Electricity Regulation in Brazil: Institutional Development and Regulatory Risks. Available at SSRN: https://ssrn.com/abstract=4052373 or http://dx.doi.org/10.2139/ssrn.4052373

Jose Roberto Ferreira Savoia (Contact Author)

FEA-USP ( email )

Av. Prof. Luciano Gualberto 908
São Paulo SP, São Paulo 05508-900
Brazil

Renata Wandroski Peris

Universidade de São Paulo ( email )

Brazil

André Castro Carvalho

affiliation not provided to SSRN ( email )

No Address Available

Eduardo Rosário Contani

affiliation not provided to SSRN ( email )

No Address Available

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