The gas distribution in Italy is nowadays subjected to a deep process of deregulation, aimed to strengthen the competitive rules. In the same time, this industry is undergoing intensive regulation constraints, particularly in the definition of service prices. The mentioned deregulation process is considered to impact positively both on profitability and productivity growth. The present study is aimed to verify how cost saving can be regarded as one of the most important competitive advantage.

This analysis is conducted on a sample of 33 firms, observed through the period 1994-1999. Categorical variables such as type of ownership, operational size and diversification of activities are also taken into account.