Do Private Utilities Outperform Local Government-Owned Utilities? Evidence from German Retail Electricity

Stiel, Caroline; Cullmann, Astrid; Nieswand, Maria

doi:10.1111/geer.12134

Cited by 11 publications

(9 citation statements)

References 58 publications

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“…Now we proceed to investigate whether the ownership differences in firm performances is confirmed under a model of cost minimization. Table 4 presents the result of the first stage estimation, i.e., the share of revenue to cost regression of (8) where the functional form is specified as the log-level in (13). We find the coefficient for investor-owned utilities dummy is 0.37 and significant at 5 percent, implying that investor-owned utilities charge the higher price-cost margin by 37 percent on average, compared with that of cooperatives.…”

Section: Estimation Of the Cost Functionmentioning

confidence: 98%

“…11 where public firms show better economic performances than private firms. Atkinson and Halvorsen, 12 Stiel et al., 13 and Scott et al. 14 find no evidence that ownership structure has a significant impact on economic performances.…”

Section: Literature Reviewmentioning

confidence: 99%

“…This contracts to Pescatrice and Trapani 10 and Wei et al 11 where public firms show better economic performances than private firms. Atkinson and Halvorsen, 12 Stiel et al, 13 and Scott et al 14 find no evidence that ownership structure has a significant impact on economic performances. Koh et al 15 argues that public and private utilities have relative advantages at different output levels, i.e., public firms have lower costs than private firms at low output levels but become less efficient than private firms as output level increases.…”

Section: Literature Reviewmentioning

confidence: 99%

“…where lnG P; K; Q it ð Þis represented by (13). Hence, the first stage provides the estimates for k d ;Ĝ P; K; Q it ð Þ , and the i.i.d residual it .…”

Section: Estimationmentioning

confidence: 99%

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Firm structure, scale economies, and productivity in the U.S. electric power industry: A cost function analysis

Jang

2020

Energy & Environment

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This paper analyzes economic performances of cooperatives relative to other types of ownership in the US electric power industry. Specifically, the paper uses a panel data of electric utilities over 2001–2013 to analyze economic performances of cooperatives relative to for-profit firms and to investigate the sources of performance differences under a model of cost minimization. The results show that investor-owned utilities are more profitable than cooperatives, but there are no significant differences in physical productivity between investor-owned utilities and cooperatives. Independent power producers are more financially profitable and more physically productive than their counterparts. The results also support that although the industry exhibits substantial scale economies over a broad range of output, cooperatives are constrained to exploit the scale economies than other groups as it is limited by higher cost of financing. This suggests that while a small number of very large firms are not required for efficient production in the industry, mergers between cooperatives could provide substantial scale economies, as discussed in the literature.

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Section: Estimation Of the Cost Functionmentioning

confidence: 98%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

“…where lnG P; K; Q it ð Þis represented by (13). Hence, the first stage provides the estimates for k d ;Ĝ P; K; Q it ð Þ , and the i.i.d residual it .…”

Section: Estimationmentioning

confidence: 99%

See 2 more Smart Citations

Firm structure, scale economies, and productivity in the U.S. electric power industry: A cost function analysis

Jang

2020

Energy & Environment

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“…Extending the analysis to fully-privatised firms is unfortunately beyond the scope of this paper due to lack of adequate microdata on the private sector. For an empirical comparison of stateowned and fully privately-owned firms in German electricity supply, seeStiel et al (2017) andCullmann et al (2017).…”

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confidence: 99%

Modern Public Enterprises: Organisational Innovation and Productivity

Stiel

2017

SSRN Journal

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In advanced economies, state-owned enterprises play an important role in sectors of general interest such as energy and water supply. The conditions under which they operate have changed fundamentally since 1998, with new strategies required for firms to preserve market shares in the face of liberalisation and technological innovation. This paper investigates the productivity effect of three strategies in new public management: corporatisation, outsourcing, and partial privatisation. Firm-level productivity is estimated from production data using a control function approach. As most of the firms are typically multiproduct firms, we suggest a method for modelling differences in the product mix and to account for heterogeneous production environments. Using a newly constructed and unique dataset from the German Federal Statistical Office, we find that outsourcing and corporatisation positively impact productivity, while partial privatisation does not increase productivity.

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Property rights and transaction costs – The role of ownership and organization in German public service provision

Friese¹,

Heimeshoff

Klein

2020

International Journal of Industrial Organization

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This paper provides evidence that ownership and organization matters for the efficiency of provision of public services. In particular, we find that pure private ownership is more efficient than pure public ownership, and public ownership is more efficient than mixed ownership. The delegation of management in different legal forms also has an impact, highlighting the importance of the design of the government-operator relationship. We apply a structural approach of production function estimation ensuring precise determination of total factor productivity for a panel of German refuse collection firms between 2000-2012. We project total factor productivity estimates on ownership and organization. Our results are in line with the trade-offs implied by the property rights literature and provide important policy implications regarding the organization of public service provision.

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Do Private Utilities Outperform Local Government-Owned Utilities? Evidence from German Retail Electricity

Cited by 11 publications

References 58 publications

Firm structure, scale economies, and productivity in the U.S. electric power industry: A cost function analysis

Firm structure, scale economies, and productivity in the U.S. electric power industry: A cost function analysis

Modern Public Enterprises: Organisational Innovation and Productivity

Property rights and transaction costs – The role of ownership and organization in German public service provision

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