Regulation and policy in Italy: don’t throw away the baby with the bath water!

The Italian water sector is undergoing a period of significant change. The sector does not require radical intervention in its ownership structure to improve investment levels and quality standards, but rather a package of measures to improve the management model and enhance independent regulation. How can tariff regulation be extended nationwide, and how can existing industry fragmentation be overcome?

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What are firms for? Redefining corporate purpose

What should be the purpose of a firm? To maximise profits or shareholder value, or to pursue wider societal objectives? Professor Julian Franks of London Business School, and Oxera Partner, discusses the roles of trust and implicit contracts in redefining corporate purpose. He looks at changes that may be required in regulated utilities, with a focus on water

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Blinded by the sun: the future of renewables disputes

The deployment of renewable energy technologies looks set to continue to grow. However, it can be challenging to integrate these technologies into existing policy frameworks and energy systems. Renewables have also been prone to legal disputes, as illustrated by recent cases brought against the Spanish government. As such disputes become more commonplace, a range of economic, financial and public policy issues will need to be examined

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Lifting the weight of state aid from project finance

In the EU, support provided by the state to finance projects operating in competitive markets typically needs to comply with state aid rules. However, there may be challenges in structuring project financing from the state in a way that is compliant with these rules. What are the fundamental elements to consider when assessing whether the funding confers an economic advantage on the recipient? What alternative financing structures could be considered?

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Common ownership and market entry

Investors’ holdings in multiple firms give rise to what is known as ‘common ownership’. Are the strategic decisions of competing firms affected by the presence of common ownership? Albert Banal-Estañol of Universitat Pompeu Fabra, Barcelona GSE and City University of London, and Melissa Newham and Jo Seldeslachts of DIW Berlin and KU Leuven, provide evidence on the impact that common ownership has on market entry, one of the most important strategic decisions that firms make, in US pharmaceutical markets

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The threat of common ownership: real or imagined?

Common ownership—the simultaneous ownership of equity of two competing companies by the same investor—has been rising steadily. This trend has been largely triggered by increasing institutional investor participation, including index funds owned by asset managers such as Vanguard and BlackRock. However, as highlighted by Oxera Partner, Professor Julian Franks, and Oxera Associate, Professor Vikrant Vig, the rise has been accompanied by an important debate on the potential anticompetitive effects of common ownership

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Four-ever? Competition remedies in the audit market

This article was nominated for the 2019 Antitrust Writing Awards. In light of recent accounting scandals, there are widespread calls for the UK competition authority to re-examine the audit market. Yet spending a substantial amount of resources on a market...

Regulation 2018: ‘back to basics’

The UK is experiencing a backlash against the liberal orthodoxy of utility regulation of ten years ago, which was based on privatisation, competition and deregulation. A recent Agenda article on the legitimacy of sectoral regulation in the UK asked ‘Is it policy, ownership, industry structure, governance, financing or regulation that is driving the problem?’ Martin Cave, Visiting Professor, London School of Economics, provides his perspective

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Legitimacy and renationalisation: where next for utility regulation?

UK regulated utilities are facing the tightest scrutiny that they have experienced in years. A tit-for-tat battle between the two main political parties in proposing changes to address public concerns has culminated in the Labour Party proposing renationalisation and the Conservative Party greater regulatory supervision. So what is the regulatory outlook for customers, companies and their investors in the context of the renationalisation agenda and other recent developments?

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Quid pro quo? What factors influence IPO allocations to investors?

Investment banks face potential conflicts of interest when conducting initial public offerings (IPOs) of shares, as they provide services for both issuing firms and buy-side investors. Tim Jenkinson and Howard Jones of the Saïd Business School, University of Oxford, and Felix Suntheim of the UK Financial Conduct Authority (FCA), use data gathered as part of the FCA’s market study into investment and corporate banking to shed light on the extent to which conflicts of interest drive allocation decisions

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