We develop a model that examines the capital structure and investment decisions of regulated firms in a setting that incorporates two key institutional features of the public utilities sector in many countries: firms are partially owned by the state and regulators are not necessarily independent. Among other things, we show that regulated firms issuemore debt, invest more, and enjoy higher regulated prices when they face more independent regulators, are more privatized, and when regulators are more pro-firm. Moreover, regulatory independence, higher degree of privatization, and pro-firm regulatory climate are associated with higher social welfare.

Investment and capital structure of partially private regulated firms

CAMBINI, CARLO;
2016

Abstract

We develop a model that examines the capital structure and investment decisions of regulated firms in a setting that incorporates two key institutional features of the public utilities sector in many countries: firms are partially owned by the state and regulators are not necessarily independent. Among other things, we show that regulated firms issuemore debt, invest more, and enjoy higher regulated prices when they face more independent regulators, are more privatized, and when regulators are more pro-firm. Moreover, regulatory independence, higher degree of privatization, and pro-firm regulatory climate are associated with higher social welfare.
2016
2015
Cambini, Carlo; Spiegel, Yossi
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11565/3997318
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