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The Influence of the Regulatory Environment on Chinese Urban Water Utilities

Author

Listed:
  • Fan Li

    (Shenzhen University)

  • Michelle Andrea Phillips

    (University of Florida)

Abstract

China is currently facing water scarcity issues, which can partially be relieved with improvements in efficiency in its urban water supply sector. Using a manually collected utility-level dataset for 2009–13, we examine the performance of Chinese urban water utilities, taking into account their regulatory environment. Our main findings are that: (1) an increase in the number of non-technical staff does not increase output levels, while an increase in the number of technical staff, length of pipe or electricity usage can increase output; (2) customer density and non-household user rates are associated with lower levels of inefficiency (or higher levels of measured efficiency), while outsourcing staff rate, non-revenue water rate, and average piped water pressure do not significantly affect efficiency. These results suggest that Chinese urban water utilities can be improved through performance-based regulation and incentives that take into account environmental factors of utilities.

Suggested Citation

  • Fan Li & Michelle Andrea Phillips, 2017. "The Influence of the Regulatory Environment on Chinese Urban Water Utilities," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 31(1), pages 205-218, January.
    • Handle: RePEc:spr:waterr:v:31:y:2017:i:1:d:10.1007_s11269-016-1519-z
    DOI: 10.1007/s11269-016-1519-z
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