0000000000881254
AUTHOR
Daniel Albalate
Legislative reforms and market dynamics in the provision of urban water service by private contract operators in Spain
Abstract This paper studies the dynamics of concentration in the Spanish market for the provision of urban water service by private contract operators in the 2000–2020 period. The market is highly concentrated. Concentration increased until 2007, at which point it started to decline when Law 30/2007 on Public Sector Contracts and Organic Law 8/2007 on Political Party Financing were passed; before rising again from 2016 onwards. This latter trend results from strategic behaviour by the two leading operators, acquiring smaller companies with a notable presence in some regional markets. Further legislative reforms aimed at safeguarding space for competition are thus proposed.
Contract Renewal in Urban Water Services, Incumbent Advantage, and Market Concentration
Contract renewal with the incumbent is common practice in the contracting-out of public services. It could, however, affect competition by reinforcing trends towards market concentration. This article contributes empirical evidence on the determinants of the result of public tenders for the renewal of private provision of the urban water service. A dataset with information on 215 public tenders held in Spain between 2008 and 2019 is employed. The methodology is grounded in logistic regression techniques. The findings indicate that incumbents' size does not play a role in the proba-bility of alternating between service providers. Furthermore, competition−proxied by the number of bidders−and …