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Balancing multiple interests in regulation: An event study of the English and Welsh water industry

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Abstract

In this paper, an event study methodology is used to identify and analyze the key regulatory initiatives taken by the economic regulator of the English and Welsh water industry during the period 1989–1994. An analysis of the movements of water company share returns relative to aggregate stock market returns suggests that regulatory interventions did affect investor expectations. The results are consistent with the hypothesis that the regulator's actions balanced the often conflicting interests of the water industry's stakeholders, and that this balance reflected the regulator's statutory duties.

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Authors and Affiliations

  1. Department of Economics, Heriot-Watt University, EH14 4AS, Riccarton, Edinburgh, UK

    John W. Sawkins

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  1. John W. Sawkins
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The author would like to thank Hector Williams for his computing assistance and Dr. Keith Bender for valuable comments on an earlier draft.

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Sawkins, J.W. Balancing multiple interests in regulation: An event study of the English and Welsh water industry. J Regul Econ 9, 249–268 (1996). https://doi.org/10.1007/BF00133476

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