A resource-based view of utilities: The key-determinant factors for customer prices and organizational costs in the Portuguese water industry

The resource-based view supports the idea that firms that make better use of their existing resources have superior performance, which depends on organizational processes and routines to lower organizational costs and prices to customers. By applying this approach to the Portuguese water industry based on a cross-sectional research strategy, the findings demonstrate that public firms' with lower organizational costs are able to charge lower prices. There are two implications of the current findings. The first is political in nature and involves the discussion of the best way to improve the provision of public services by utilities. From an economic, managerial and social approach, all the arrangements, whether public or private, should be rethought. The second implication is theoretical, since firm effects can be established based on the existence of superior resources, the key variable to explain differences in organizational performance.