This dissertation seeks to identify internal and external institutional arrangements that would allow investor owned utility companies to best economize on costs. The main body of this work is structured around three interdependent essays. The first essay is a theoretical exploration from which a synthesis between Transaction Costs Economics and the Theory of Contestable Markets is derived. The second essay utilizes the framework developed in the essay to explore the institutional changes associated with regulatory restructuring. The third essay is an empirical analysis using iterated seemingly unrelated regression with a one-way fixed effects specification. Findings show a strong relationship economies of vertical separation and short-term contracting.
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