Productivity in electricity generation: The role of firm ownership and regional institutional quality

Abstract

The electricity generation sector is considered the most competitive segment of the industry and has undergone significant reforms in recent years. Liberalization, market opening and privatizations have characterized, with country-specific variations, the European electricity supply market. This paper examines the links between possible outcomes of these reforms, in particular firm ownership, and total factor productivity, while also controlling for regional characteristics. Results of the estimation of quantile regressions show that foreign ownership is associated with higher total factor productivity (TFP) levels, while public ownership exhibits a different behavior in different quantiles. Regional institutional quality is positively related to TFP. Results are robust to alternative TFP measures.