Determinants of financial self-sufficiency of Mexican water utilities
DOI:
https://doi.org/10.24850/j-tyca-15-01-04Keywords:
Tariff, urban water, physical efficiency, commercial efficiency, global efficiency, water utilitiesAbstract
This article aims to explore the variables that impact the financial self-sufficiency of water utilities in Mexico. A panel database is built with the public information available from 31 agencies in big cities, which serve a third of the country's urban population during the years 2017 to 2019, referring to financial self-sufficiency, domestic, commercial and industrial tariffs, cross-subsidy level, physical efficiency, commercial efficiency, collection efficiency, global efficiency and a dichotomous variable that is activated when the utility is from a state in southeastern Mexico. It is found that there is a significant positive relationship between self-sufficiency and the variables domestic tariff, physical efficiency, commercial efficiency and global efficiency. Likewise, a strong significant negative relationship is found between self-sufficiency and that the organization belongs to a state in the Mexican southeast. It is concluded that the public financial information of the organizations is very limited, that an adequate tariff, as well as efficiency in management, increases financial self-sufficiency; and that the southeastern states, where there is a lot of water, decrease incentives to improve the efficiency of water utilities.
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