Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/183368 
Authors: 
Year of Publication: 
2016
Series/Report no.: 
IFN Working Paper No. 1139
Publisher: 
Research Institute of Industrial Economics (IFN), Stockholm
Abstract: 
I examine the effects of privatization, in the form of acquisitions, in the Swedish electricity distribution sector. As the majority of the distribution networks remained publicly owned, I use a synthetic control method to identify the effects on price and labor efficiency. In comparison to their synthetic counterparts, I find that the acquired networks increased labor efficiency by on average 18 percent, while no effect is found on the price. Thus, the evidence suggests substantial efficiency gains but that these are not fed through to consumer prices. Since each acquisition involved several bordering networks that were separately operated by each municipality prior to the acquisitions, I examine to what extent the efficiency gains are likely to be driven by increased economies of scale. Results suggest that the entire effect can be explained by increased economies of scale, questioning the causal effect of privatization per se.
Subjects: 
Incentive regulation
Electricity distribution
Natural monopoly
Norm model regulation
Privatization
Acquisitions
JEL: 
L33
L52
L94
Document Type: 
Working Paper

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