Ownership, Investment Policies and Funding Choices of Italian Water Utilities: an Empirical Analysis

Nowadays, the efficient management of water has become the focus of vast debate, both in the academic literature and in the practical and regulatory field. Due to the growing importance and scarcity of water resources, it has become crucial to better understand how to improve the organizational efficiency of water utilities. By adopting an accounting perspective and using statistical methods, this paper analyzes whether and to what extent investment and financial strategies differ among clusters of water utilities with different ownership structures. The paper focuses on the Italian water industry, a context considered particularly appropriate due to the coexistence of utilities with different ownership structures. The main results of the paper show that ownership affects the level of investment as well as the financial structure and costs of water utilities. The evidence provided by this study should encourage national governments and regulatory authorities to select water utilities with the greatest investment potential measured in terms of financial efficiency and effectiveness.