Profit, productivity and price performance changes in the water and sewerage industry:an empirical application for England and Wales

Maziotis, Alexandros, Saal, David S., Thanassoulis, Emmanuel and Molinos-Senante, María (2015). Profit, productivity and price performance changes in the water and sewerage industry:an empirical application for England and Wales. Clean Technologies and Environmental Policy, 17 (4), pp. 1005-1018.

Abstract

This paper aims to analyse the impact of regulation in the financial performance of the Water and Sewerage companies (WaSCs) in England and Wales over the period 1991–2008. In doing so, a panel index approach is applied across WaSCs over time to decompose unit-specific index number-based profitability growth as a function of the profitability, productivity and price performance growth achieved by benchmark firms, and the catch up to the benchmark firm achieved by less productive firms. The results indicated that after 2000 there is a steady decline in average price performance, while productivity improves resulting in a relatively stable economic profitability. It is suggested that the English and Welsh water regulator is now more focused on passing productivity benefits to consumers, and maintaining stable profitability than it was in earlier regulatory periods. This technique is of great interest for regulators to evaluate the effectiveness of regulation and companies to identify the determinants of profit change and improve future performance, even if sample sizes are limited.

Publication DOI: https://doi.org/10.1007/s10098-014-0852-2
Divisions: Aston Business School
Aston Business School > Economics finance & entrepreneurship
Aston Business School > Operations & information management
Aston Business School > Operations & information management research group
Additional Information: The final publication is available at Springer via http://dx.doi.org/10.1007/s10098-014-0852-2 Funding: Economic and Social Science Research Council; Office of Water Services (Ofwat); and Generalitat Valenciana (APOSTD/2013/110)
Uncontrolled Keywords: panel index numbers,price performance,profit decomposition,regulation,total factor productivity,water and sewerage industry,Environmental Chemistry,Environmental Engineering,Management, Monitoring, Policy and Law
Full Text Link: http://link.springer.com/article/10.1007%2Fs10098-014-0852-2
Related URLs: http://www.scopus.com/inward/record.url?scp=84941640435&partnerID=8YFLogxK (Scopus URL)
Published Date: 2015-04
Authors: Maziotis, Alexandros
Saal, David S.
Thanassoulis, Emmanuel ( 0000-0002-3769-5374)
Molinos-Senante, María

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Version: Accepted Version


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