The Italian highway industry has undergone an institutional and regulatory reform through the last 15 years, characterised by changes in ownership and the introduction of a regulatory framework based on price cap regulation. To assess the effect of the reforms on firms’ performance, we use information on a sample of Italian concessionaires (virtually representing all the industry) over the 1992-2003 period and 1) estimate the technical progress in the industry, thereby providing a reference value for the X factor in the price cap formula; 2) assess the relative productivity of private vs. public concessionaires; 3) evaluate whether price cap regulation has induced firms to use resources efficiently, 4) determine the possible effect of the inclusion of the quality index in the price cap formula. We find that the introduction of a price cap regime does not increase firms’ productivity whereas a sharp increase in maintenance costs is recorded, arguably due to the presence of the quality indicator in the price cap formula. Furthermore, firms appear to have gained from the privatisation process and from a technical progress occurred in the period. We also find high density economies and a steady and large increase in traffic.

Institutional and regulatory reform of the Italian motorway industry: a first empirical assessment

BENFRATELLO, LUIGI;
2007

Abstract

The Italian highway industry has undergone an institutional and regulatory reform through the last 15 years, characterised by changes in ownership and the introduction of a regulatory framework based on price cap regulation. To assess the effect of the reforms on firms’ performance, we use information on a sample of Italian concessionaires (virtually representing all the industry) over the 1992-2003 period and 1) estimate the technical progress in the industry, thereby providing a reference value for the X factor in the price cap formula; 2) assess the relative productivity of private vs. public concessionaires; 3) evaluate whether price cap regulation has induced firms to use resources efficiently, 4) determine the possible effect of the inclusion of the quality index in the price cap formula. We find that the introduction of a price cap regime does not increase firms’ productivity whereas a sharp increase in maintenance costs is recorded, arguably due to the presence of the quality indicator in the price cap formula. Furthermore, firms appear to have gained from the privatisation process and from a technical progress occurred in the period. We also find high density economies and a steady and large increase in traffic.
Servizi Pubblici: Nuove Tendenze nella Regolamentazione, nella Produzione e nel Finanziamento
Franco Angeli
327
351
9788846487865
http://www.francoangeli.it/
Price Cap Regulation; Motorways
L. BENFRATELLO; A. IOZZI; P. VALBONESI
File in questo prodotto:
Non ci sono file associati a questo prodotto.

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/2318/49132
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
  • ???jsp.display-item.citation.isi??? ND
social impact