In sectors of general interests, the economic activity of the state decreased over decades as a consequence of privatisation and liberalisation. Recently, local governments began to remunicipalise in the energy and water sector, thereby creating a new and modern generation of state-owned firms. These firms, however, differ in organisation and production environment from the state monopolists of the last century.
The research project empirically studies the performance of state-owned firms in energy and water supply, with respect to productivity, market power and price setting, and innovative capacity. The project assesses the state-owned firms' ability to manage recent socio-economic challenges, such as demographic changes and the transition to a low-carbon energy economy, implying infrastructure investments and innovative solutions. The project furthermore examines to what extent variations in performance can be explained with heterogeneous internal organisation and differences in public owners’ influence.
The project uses, among others, a structural production function estimation approach to determine firm-level performance and to account for firms' legal organisation, ownership structure, and innovative capacity.