Nonmarket performance: Evidence from U.S. electric utilities

Bonardi, Jean-Philippe and Holburn, Guy and Vanden Bergh, Rick (2006): Nonmarket performance: Evidence from U.S. electric utilities.

Abstract

Building on a framework that assesses the attractiveness of ‘political markets’ – where firms transact over public policies with government policy-makers – we develop hypotheses regarding the success or performance of firms’ nonmarket strategies. We propose that the ability of firms to gain more favorable policy outcomes is increasing in the degree of rivalry among elected politicians; the firm’s recent experience with policy-makers; and the opportunity to learn from other firms’ recent experiences; and is decreasing in the degree of rivalry from competing interest groups and the resource base of regulatory agencies. Using data on regulatory filings for rate increases made by the population of U.S. privately-owned electric utilities over a 13 year period, we find empirical support for our arguments.

• Item Type: MPRA Paper
• Language: English
• Keywords: Nonmarket strategy, lobbying, Electric utilities
• Subjects: L - Industrial Organization > L5 - Regulation and Industrial Policy > L51 - Economics of Regulation; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration; L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L94 - Electric Utilities

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