Since 1998, public firms have had to adapt to a market environment that is verydifferent from the post-war era in Europe. The liberalisation of services of generaleconomic interest across Europe led to competition between public and privateproviders, while new technologies require infrastructure investment and innovativesolutions. In addition, urbanisation and population ageing pose new challenges forlocal public service provision. Focusing on German energy and water utilities, thedissertation empirically analyses total factor productivity and the cost structure ofcontemporary public firms for the period 2003 to 2014 based on a structural productionframework. First, we evaluate the performance of public firms under competition,estimating firm-level productivity in the electricity retail sector. Second,we study public utilities’ internal organisation, analysing the productivity effect ofthree new public management strategies: corporatisation, partial privatisation, andoutsourcing of business activities. Finally, we examine regional disparities in theproductivity and costs of public water supply resulting from demographic changes.The empirical analysis uses official microdata on German utilities.
Keywords: structural production function, total factor productivity, multi-productfirms, firm organisation, state ownership, public firms, public service provision, liberalisation,demographic change, urbanisation, electricity retail, water supply, heatsupply, gas supply