The Korea Local Administration Review

The purpose of this study is to measure the operating efficiency of localpublic water utilities enterprises in Korea and to examine factors affectingefficiency. Our major concerns are in economy of scale, economy of density,economy of scope in market and production structure in local government. Weperformed DEA/window efficiency measurement and panel tobit regressionanalysis to take into account the factors affecting efficiency of local publicwater utilities enterprises. In doing that, this paper utilizes panel data (2002 to2013) from 87 local public water utilities enterprises in Korea. According toempirical results, the efficiency of local public water utilities enterprises isincreasing. Economy of density, economy of scope, and local financialindependence rate has positive effect on local public water utilities enterprisesat the 5% significance level. These findings suggest that we need to considernot only integrated operating in public water and sewage services but alsointensive operating in order to enhance efficiency. That is, about discussion ofefficiency of local public water utilities enterprises, we need to considereconomic features in market and production structure in local government.
□ Keywords: local public water utilities enterprises, factors of efficiency, economyof scale, economy of densit