Investigating the Key Factors Influencing the Profitability of Romanian Public Water Supply and Sewerage Services
This paper explores the dynamics of the public water supply and sewerage service in Romania, focusing on the relationships between different operational, commercial and financial variables and their impact on the operating profit rate. The aim of the paper is to analyze the interactions, both in...
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| Format: | Article |
| Language: | English |
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Editura ASE
2025-08-01
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| Series: | Amfiteatru Economic |
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| Online Access: | https://www.amfiteatrueconomic.ro/temp/Article_3469.pdf |
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| author | Kamer-Ainur Aivaz Dorin Jula Octavia Moise George Banghiore Diane Paula Corina Vancea Andreea Simona Săseanu |
| author_facet | Kamer-Ainur Aivaz Dorin Jula Octavia Moise George Banghiore Diane Paula Corina Vancea Andreea Simona Săseanu |
| author_sort | Kamer-Ainur Aivaz |
| collection | DOAJ |
| description | This paper explores the dynamics of the public water supply and sewerage service in
Romania, focusing on the relationships between different operational, commercial and
financial variables and their impact on the operating profit rate. The aim of the paper is to
analyze the interactions, both in the short and in the long term, between these economic
variables, using an advanced econometric methodology, by applying the ARDL
(Autoregressive Distributed Lag) model. The analysis was carried out on a dataset of 11
annual cycles, allowing to assess the stability and dynamics of the relationships studied. The
results indicate a positive correlation between water infrastructure expansion and the rate of
profit, suggesting that investments in network length can contribute to the economic growth
of the sector. In contrast, tariff increases showed a long-term negative impact on the profit
rate, reflecting consumers' sensitivity to price changes. Efficient management of non-revenue
water and damage reduction were also found to be key to improve financial performance and
increase sustainability. The paper provides an in-depth understanding of market mechanisms
and can support the development of more effective public policies for water resource
management in the context of current socio-economic and environmental challenges. |
| format | Article |
| id | doaj-art-c125acf2ecf8434b9d9f9252d6a6b276 |
| institution | Kabale University |
| issn | 1582-9146 2247-9104 |
| language | English |
| publishDate | 2025-08-01 |
| publisher | Editura ASE |
| record_format | Article |
| series | Amfiteatru Economic |
| spelling | doaj-art-c125acf2ecf8434b9d9f9252d6a6b2762025-08-20T04:00:43ZengEditura ASEAmfiteatru Economic1582-91462247-91042025-08-0127701209 122010.24818/EA/2025/70/1209 Investigating the Key Factors Influencing the Profitability of Romanian Public Water Supply and Sewerage ServicesKamer-Ainur Aivaz0https://orcid.org/0000-0002-2204-2864 Dorin Jula1https://orcid.org/0000-0002-3530-4675Octavia Moise2https://orcid.org/0009-0002-3443-4109George Banghiore3https://orcid.org/0009-0006-3461-0431Diane Paula Corina Vancea4https://orcid.org/0009-0004-6756-7383Andreea Simona Săseanu5https://orcid.org/0000-0002-8553-6191Ovidius University of Constanta, Constanta, RomaniaInstitute of Economic Forecasting, Romanian Academy, Ecological University, Bucharest, RomaniaRomanian Academy, School of Advanced Studies of the Romanian Academy, Doctoral School of Economics of the National Institute of Economic Research Constantin C. Kirițescu, Bucharest, RomaniaRomanian Academy, School of Advanced Studies of the Romanian Academy, Doctoral School of Economics of the National Institute of Economic Research Constantin C. Kirițescu, Bucharest, RomaniaOvidius University of Constanta, Constanta, RomaniaBucharest University of Economic Studies, RomaniaThis paper explores the dynamics of the public water supply and sewerage service in Romania, focusing on the relationships between different operational, commercial and financial variables and their impact on the operating profit rate. The aim of the paper is to analyze the interactions, both in the short and in the long term, between these economic variables, using an advanced econometric methodology, by applying the ARDL (Autoregressive Distributed Lag) model. The analysis was carried out on a dataset of 11 annual cycles, allowing to assess the stability and dynamics of the relationships studied. The results indicate a positive correlation between water infrastructure expansion and the rate of profit, suggesting that investments in network length can contribute to the economic growth of the sector. In contrast, tariff increases showed a long-term negative impact on the profit rate, reflecting consumers' sensitivity to price changes. Efficient management of non-revenue water and damage reduction were also found to be key to improve financial performance and increase sustainability. The paper provides an in-depth understanding of market mechanisms and can support the development of more effective public policies for water resource management in the context of current socio-economic and environmental challenges. https://www.amfiteatrueconomic.ro/temp/Article_3469.pdfwater supply managementprofitabilitypmg/ardl modelingtariff impactinfrastructuresustainability |
| spellingShingle | Kamer-Ainur Aivaz Dorin Jula Octavia Moise George Banghiore Diane Paula Corina Vancea Andreea Simona Săseanu Investigating the Key Factors Influencing the Profitability of Romanian Public Water Supply and Sewerage Services Amfiteatru Economic water supply management profitability pmg/ardl modeling tariff impact infrastructure sustainability |
| title | Investigating the Key Factors Influencing the Profitability of Romanian Public Water Supply and Sewerage Services |
| title_full | Investigating the Key Factors Influencing the Profitability of Romanian Public Water Supply and Sewerage Services |
| title_fullStr | Investigating the Key Factors Influencing the Profitability of Romanian Public Water Supply and Sewerage Services |
| title_full_unstemmed | Investigating the Key Factors Influencing the Profitability of Romanian Public Water Supply and Sewerage Services |
| title_short | Investigating the Key Factors Influencing the Profitability of Romanian Public Water Supply and Sewerage Services |
| title_sort | investigating the key factors influencing the profitability of romanian public water supply and sewerage services |
| topic | water supply management profitability pmg/ardl modeling tariff impact infrastructure sustainability |
| url | https://www.amfiteatrueconomic.ro/temp/Article_3469.pdf |
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