Abstract:
This study compares the level of value added
and productivity generated by the companies activating
in the water and wastewater sector and investigates their
determinants. To this end, we perform a panel data
analysis over the period 2007 to 2014 using firm-level
data. We include in our analysis nine public companies
located in four counties inside the West Region of
Romania, namely Arad, Caraș-Severin, Hunedoara and
Timiș. We compare a classic Pooled OLS, a fixed effect
and a random effect estimator. Our static analysis shows
that the value added is mainly explained by the
operating revenue, profit margin and liquidity ratio.
While the size of the companies positively influences the
level of value added, the consumers wealthy, measured
in terms of GDP per capita, has no clear influence. It
appears that regional operating companies perform
better compared with small firms acting at local level. A
similar result is recorded when we estimate the drivers
of the productivity level, measured in terms of value
added per employee. We conclude that the economies of
scale recorded by companies located in the main cities of
the region, and an adequate financial management of
these companies, both contribute to enhancing their
economic performances.
