Search

Many electricity markets in the world have experienced the vertical unbundling where the generation and transmission sectors were separated from a vertically-integrated monopolistic power company. This restructuring could positively impact the productivity of the firms because of intensified competition and enhanced autonomy but could also negatively affect the productivity because of the loss of synergy and scaled economy. By exploiting the vertical unbundling that took place in China in 2003, this study finds that vertical unbundling increased the labor use of the generation firms and the material use of the transmission firms. Additional investigation reveals that generation firms suffer from an efficiency loss in labor use due to the loss of coordination after vertical unbundling and the transmission firms face an increased transaction cost in acquiring material and bear the additional cost transferred from the efficiency loss of the upstream generation firms. Our findings suggest that benefits of vertical unbundling relative to integration critically hinge on the market structure of the industry.

A fundamental policy in European broadband regulation is unbundled access to the local loop of the incumbent telephone company. We present comparative static results that show as the access price decreases, the retail price decreases, the variety of plans offered by Internet service providers increases and the quantity of each variety increases when a threshold condition is met. Using data from 18 European countries from 2006 to 2012, we find empirical support for these results when Internet product variety is measured by variation in download speeds.

Previous studies often examined how a broad-based institution affects foreign direct investment (FDI) flows across countries. However, analysis of differential impacts of two or more constituent institutions within a broad-based institution appears to be more useful for policy decision-making. There is a paucity of studies on how constituent institutions within a broad measure of institution affect FDI across countries. Our article constitutes the first attempt in bridging this gap. In this article, we examine the relative effects of property rights institution (PI) and contracting institution (CI) on investment flows. Our results show that PI is much more important than CI in determining the cross-border flows of FDI and affiliate sales. Moreover, PI is found to be more important for FDI than for affiliate sales, indicating that final goods are less of a concern for being expropriated by governments and powerful elites than capital goods. Through unbundling a broad-based institution and examining...

What effect does the firm structure have on the quality of service delivered by networks and infrastructure industries? We answer this question by empirically assessing the impacts of complete vertical separation, such as ownership unbundling, on the quality of service delivered by a liberalized network industry. Electricity distribution utilities in New Zealand are considered for this purpose and are analysed using panel-data econometrics. The results show robust evidence that ownership unbundling contributed to a fall in the duration and frequency of supply interruptions in electricity distribution. However, the results also show that unbundling has no effect on reducing distribution network losses. These results, overall, highlight the nonsimple impacts of ownership unbundling on the quality of electricity distribution. We suggest that the quality of service may largely improve when considered in the economic regulation of electricity networks than completely relying on specific reform measures...

Do market-oriented economic reforms result in higher levels of human well-being? This article studies the impact of macro-level institutional and infrastructure reforms on the economic, educational and health dimensions of human well-being among 25 transition economies. We use panel data econometrics based on the LSDVC technique to analyse the effects of market-oriented reforms on the human development index (HDI), as a measure of human well-being, from 1992 to 2007. The results show the complexity of reform impacts in transition countries. They show that institutional and economic reforms led to positive economic effect and significant impacts on other dimensions of human development. We find some positive economic impacts from infrastructure sectors reforms. However, not every reform measure appears to generate positive impacts. Large-scale privatizations show negative effects in health and economic outcomes. The overall results show the importance of the interaction among different reform measures and the combined effect of these on human development.

The positive effects of broadband networks and services on productivity and economic growth are well established. Looking at broadband as an engine of economic prosperity, the OECD and its member states are seeking to foster its widespread adoption. However, which public policies best promote the adoption of broadband remains controversial. This article contributes in two ways to this discussion. It offers a comprehensive discussion of the factors that influence broadband adoption and uses an econometric approach that is well-suited to overcome the challenges of modelling broadband adoption. This framework allows drawing more robust and nuanced policy recommendations.