We study the effect of ownership structure and regulatory independence on the interaction between capital structure and regulated prices using a comprehensive panel data of publicly traded European utilities. We find that firms in our sample tend to have a higher leverage if they are privately-controlled and regulated by an independent regulatory agency. Moreover, the leverage of these firms has a positive and significant effect on their regulated prices, but not vice versa. Our results are consistent with the theory that privately-controlled regulated firms use leverage strategically to obtain better regulatory outcomes.

Capital structure and regulation: do ownership and regulatory independence matter?

BORTOLOTTI, Bernardo;
2011-01-01

Abstract

We study the effect of ownership structure and regulatory independence on the interaction between capital structure and regulated prices using a comprehensive panel data of publicly traded European utilities. We find that firms in our sample tend to have a higher leverage if they are privately-controlled and regulated by an independent regulatory agency. Moreover, the leverage of these firms has a positive and significant effect on their regulated prices, but not vice versa. Our results are consistent with the theory that privately-controlled regulated firms use leverage strategically to obtain better regulatory outcomes.
2011
20
517
564
Bernardo Bortolotti; Carlo Cambini; Laura Rondi; Yossi Spiegel
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2318/137876
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