Pablo Arocena

Generating Efficiency: Economic and Environmental Regulation of Public and Private Electricity Generators in Spain

Economic regulation of firms with market power has placed increasing emphasis on incentive-based regulation such as price caps. We focus on the effect of regulation as distinct from ownership, and identify the effect of two different regulatory schemes on both publicly and privately owned Spanish electricity generators. Publicly owned generators were more efficient under cost of service regulation; private (but not public) firms responded to incentive regulation by increasing efficiency, bringing their productivity to similar levels. We introduce some novelty in modelling efficiency, including three pollutants and declared plant availability as outputs, and we test for the effect of environmental regulation in reducing pollutants

Convergence and productive efficiency in fourteen OECD countries: A non-parametric frontier approach

Abstract This paper explores the use of a non-parametric frontier approach to analyse multi-factor productivity across time and countries. We argue that conventional measures of total factor productivity involve some restrictive assumptions that might bias the results. A non-parametric approach avoids these assumptions. The model uses linear programming techniques to examine the productivity catching-up in 14 OECD countries over the 1970–1990 period, under the assumption of variable returns to scale. We find evidence of convergence, even if at quite different speeds, for total industry, for manufacturing and for services.

An empirical analysis of the effectiveness of occupational health and safety management systems in SMEs

This article analyses the effectiveness of occupational health and safety (OHS) management in small and medium-sized enterprises (SMEs). In particular, we (1) provide an overview of the implementation of occupational risk preventive activities in a sample of SMEs; (2) characterize alternative approaches of OHS management systems; (3) assess the effectiveness of the identified OHS systems in occupational safety outcomes; and (4) analyse the factors affecting the adoption of such OHS systems. The study is based on primary data obtained by means of a survey on OHS management in 193 Spanish manufacturing SMEs. The analysis disentangles differences between the OHS activity of small-sized enterprises (SSEs) — those under 50 employees — and medium-sized enterprises (MSEs) — 50—250 employees. We find evidence that the effort and type of OHS management system does significantly affect the injury rate. More specifically, firms that complement traditional technical preventive activities with people and organization-oriented procedures are the most effective in reducing occupational accidents. Such advanced OHS systems are significantly less developed in SSEs. Our results also reveal that the choice of OHS system is determined by the quality of industrial relations, rate of unionization, intensity of price-based competition, access to public aid and training activities provided by the OHS public agencies, technology intensity, and the manual nature of workers’ tasks.

Scale and Scope Economies and the Efficient Vertical and Horizontal Configuration of the Water Industry: A Survey of the Literature

Abstract This paper surveys the literature on scale and scope economies in the water and sewerage industry. The magnitude of scale and scope economies determines the cost efficient configuration of any industry. In the case of a regulated sector, reliable estimates of these economies are relevant to inform reform proposals that promote vertical (un)bundling and mergers. The empirical evidence allows some general conclusions. First, there is considerable evidence for the existence of vertical scope economies between upstream water production and distribution. Second, there is only mixed evidence on the existence of (dis)economies of scope between water and sewerage activities. Third, economies of scale exist up to certain output level, and diseconomies of scale arise if the company increases its size beyond this level. However, the optimal scale of utilities also appears to vary considerably between countries. Finally, we briefly consider the implications of our findings for water pricing and point to several directions for necessary future empirical research on the measurement of these economies, and explaining their cross country variation.

Price regulation in the Spanish energy sectors: who benefits?

Abstract This paper analyses the distribution of benefits between firms and consumers due to the price regulation of the Spanish energy sectors (electricity, oil fuels and gas) during the decade 1987–1997. To that effect, we compare the actual evolution of energy prices with alternate benchmarks in order to assess the potential existence of a pro-industry or a pro-consumer bias in the pricing policies followed by the regulator. Our results show a pro-industry-biased regulatory context, where consumers benefitted very little from price control. The successive price adjustments over time allowed the companies to keep all the productivity gains and cost reductions and to increase their profitability rates relative to those achieved in the manufacturing sector.

Vertical and Horizontal Scope Economies in the Regulated U.S. Electric Power Industry

This paper investigates vertical economies between generation and distribution of electric power, and horizontal economies between different types of power generation in the U.S. electric utility industry. Our quadratic cost function model includes three generation output measures (hydro, nuclear and fossil fuels), which allows us to analyze the effect that generation mix has on vertical economies. Our results provide (sample mean) estimates of vertical economies of 8.1% and horizontal economies of 5.4%. An extensive sensitivity analysis is used to show how the scope measures vary across alternative model specifications and firm types.

The Effect of Occupational Safety Legislation in Preventing Accidents at Work: Traditional versus Advanced Manufacturing Industries

We analyze the effect of occupational safety and health (OSH) legislation in reducing workplace accidents. It is argued that different impacts should be expected in advanced and traditional manufacturing sectors. We test this hypothesis with data on Spanish manufacturing throughout the period 1988–2004. To that effect, we estimate the relationship between the number of serious injuries and the potential risk factors, by means of diverse specifications of the negative binomial regression model for panel data. Our results indicate that, while the adoption of the new OSH regulation did contribute to the reduction in the number of injuries in advanced manufacturing sectors, the accident rates in traditional manufacturing did not show any statistically significant change following the reform.

Access as a Motivational Device: Implications for Human Resource Management

This paper analyzes the employment relationship on the basis of the notion of access. We argue that the degree of access provided by a job is an incentive to activate the employee’s self-actualization needs. We investigate the effect of access on the workers’ performance through an agency model and provide a number of propositions with practical implications for personnel policies. Our results are consistent with the intuition emerged from the real business practice as well as with many of the arguments on the substitutive role between monetary and non-monetary incentives frequently reported in the literature.

On the Cost-Efficiency of Service Delivery in Small Municipalities

Arcelus F. J., Arocena P., Cabasés F. and Pascual P. On the cost-efficiency of service delivery in small municipalities, Regional Studies. This paper analyses the determinants of the efficiency of local government spending. To that effect, a stochastic cost frontier is estimated on a sample of 260 small municipalities from Navarre, a region located in northern Spain. The results suggest that the cost-efficiency in the provision of municipal services increases with (1) the level of pooling or joint provision of services among municipalities; (2) the saliency of local taxes, as compared with regional grants, in its operating budget; (3) the presence of external public comptrollers; and (4) the magnitude of the municipalitys accumulated past investment in infrastructures.

Why are Firms Challenging Conventional Wisdom on Moral Hazard? Revisiting the Fair Wage-Effort Hypothesis

Economic theory regarding moral hazard at work is somewhat at odds with recent business evidence. Whereas firms in economically and technologically stable environments could apparently follow conventional wisdom when trying to reduce moral hazard through tight supervision and incentive packages, the increasingly innovative and competitive environment is pushing firms to follow human resource practices that explicitly and consciously make managers more vulnerable to opportunistic conducts. We explain this paradox through a generalization of Akerlof and Yellens fair-wage--effort hypothesis. We argue there is a tradeoff between the effort that firms can capture from their workers (controllable effort) and the level of discretionary effort that employees can offer, upon which the particular excellence and innovative performance of the firm relies. We test our proposition on a wide dataset composed of 2882 workers. After controlling for several firm and industry traits, evidence confirms the potential role of moral hazard as an opportunity for excellence at work. Copyright 2011 The Author 2010. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.