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| Author: | Devaney, M. |
| Title: | Regulator selection and endogenous systematic risk. |
| Journal: | Energy Economics
1991 : APR, VOL. 13:2, p. 86-92 |
| Index terms: | REGULATIONS RISK ANALYSIS CAPITAL COSTS PUBLIC SERVICES |
| Language: | eng |
| Abstract: | An important concern in finance literature is whether the cost of capital in regulated industries is endogenous to the regulatory process. Cross-spectral estimates of the market model are used to determine if the method of regulator selection contributes to either frequency dependence or phase shift in electric utility systematic risk. It is shown here that the electric utilities regulated by elected commissions experience frequency dependence in systematic risk. This supports the opinion that the cost of capital is endogenous to the regulatory process. |
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