IDEAS home Printed from https://ideas.repec.org/a/eee/telpol/v44y2020i5s0308596120300501.html
   My bibliography  Save this article

Telecommunications industry efficiency: A comparative analysis of high and middle income countries

Author

Listed:
  • Oredegbe, Abayomi
  • Zhang, Yahua

Abstract

This study evaluates telecommunications industry efficiency in 19 countries grouped into high income countries (HICs) and middle income countries (MICs). Using data from 2001 to 2013 and a two-stage Data Envelopment Analysis (DEA), it finds that HICs outperformed MICs, however, the two groups of countries exhibited improved technical efficiency, managerial effectiveness, and operational scale. Additionally, time in deregulation is negatively associated with technical and scale efficiency in HICs, however, the influence is insignificant in MICs. Labour productivity drives technical efficiency in HICs. Also, it augments managerial resourcefulness in HICs and MICs, however, its influence on scale efficiency is immaterial. Revenue per subscription enhances technical efficiency and managerial effectiveness in the two groups of countries. The relationship with scale efficiency, which is positive in HICs is irrelevant in MICs. Capital intensity has insignificant influence on managerial effectiveness in the two clusters of countries, however, it undermines technical efficiency in HICs and scale efficiency in MICs. Gross national income per capita is inconsequential to scale enhancement. However, it contributes to technical efficiency in the two categories of countries and drives managerial performance in HICs. Efficiency performances in HICs and MICs are insensitive to the industry's concentration level. Inflation has insignificant influence on scale efficiency in HICs and MICs. Although, it drives technical efficiency and managerial performance in MICs, the influence in HICs is immaterial. The joint impact of labour productivity and capital intensity is irrelevant to operational scale in HICs and MICs, however, it is negatively associated with technical efficiency and managerial effectiveness in MICs. This empirical study provides additional insight that managers in the industry and policy makers will find useful during strategy formulation and policy deliberations.

Suggested Citation

  • Oredegbe, Abayomi & Zhang, Yahua, 2020. "Telecommunications industry efficiency: A comparative analysis of high and middle income countries," Telecommunications Policy, Elsevier, vol. 44(5).
    • Handle: RePEc:eee:telpol:v:44:y:2020:i:5:s0308596120300501
    DOI: 10.1016/j.telpol.2020.101958
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0308596120300501
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.telpol.2020.101958?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Birgit Aschhoff & Tobias Schmidt, 2008. "Empirical Evidence on the Success of R&D Cooperation—Happy Together?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 33(1), pages 41-62, August.
    2. Madden, Gary & Savage, Scott J, 2001. "Regulation and International Telecommunications Pricing Behaviour," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 10(1), pages 247-265, March.
    3. Gutierrez, Luis Hernando, 2003. "The Effect of Endogenous Regulation on Telecommunications Expansion and Efficiency in Latin America," Journal of Regulatory Economics, Springer, vol. 23(3), pages 257-286, May.
    4. Li, Wei & Xu, Lixin Colin, 2004. "The Impact of Privatization and Competition in the Telecommunications Sector around the World," Journal of Law and Economics, University of Chicago Press, vol. 47(2), pages 395-430, October.
    5. Ma, Wenliang & Wang, Qiang & Yang, Hangjun & Zhang, Yahua, 2020. "Is multimarket contact an antitrust concern? A case of China’s airline market," Transportation Research Part A: Policy and Practice, Elsevier, vol. 132(C), pages 515-526.
    6. Demirbag, Mehmet & Tatoglu, Ekrem & Glaister, Keith W. & Zaim, Selim, 2010. "Measuring strategic decision making efficiency in different country contexts: A comparison of British and Turkish firms," Omega, Elsevier, vol. 38(1-2), pages 95-104, February.
    7. Asimakopoulos, Grigorios & Whalley, Jason, 2017. "Market leadership, technological progress and relative performance in the mobile telecommunications industry," Technological Forecasting and Social Change, Elsevier, vol. 123(C), pages 57-67.
    8. Maurice J. G. Bun & Teresa D. Harrison, 2019. "OLS and IV estimation of regression models including endogenous interaction terms," Econometric Reviews, Taylor & Francis Journals, vol. 38(7), pages 814-827, August.
    9. Claudia M. Buch & Cathérine T. Koch & Michael Koetter, 2013. "Do Banks Benefit from Internationalization? Revisiting the Market Power--Risk Nexus," Review of Finance, European Finance Association, vol. 17(4), pages 1401-1435.
    10. Moreno, Plácido & Lozano, Sebastián & Gutiérrez, Ester, 2013. "Dynamic performance analysis of U.S. wireline telecommunication companies," Telecommunications Policy, Elsevier, vol. 37(6), pages 469-482.
    11. Bortolotti, Bernardo & D'Souza, Juliet & Fantini, Marcella & Megginson, William L., 0. "Privatization and the sources of performance improvement in the global telecommunications industry," Telecommunications Policy, Elsevier, vol. 26(5-6), pages 243-268, June.
    12. Fink, Carsten & Mattoo, Aaditya & Rathindran, Randeep, 2003. "An assessment of telecommunications reform in developing countries," Information Economics and Policy, Elsevier, vol. 15(4), pages 443-466, December.
    13. Rajiv Banker & Zhanwei Cao & Nirup Menon & Ram Natarajan, 2010. "Technological progress and productivity growth in the U.S. mobile telecommunications industry," Annals of Operations Research, Springer, vol. 173(1), pages 77-87, January.
    14. Banker, Rajiv D. & Cooper, William W. & Seiford, Lawrence M. & Thrall, Robert M. & Zhu, Joe, 2004. "Returns to scale in different DEA models," European Journal of Operational Research, Elsevier, vol. 154(2), pages 345-362, April.
    15. Zhang, Yahua & Wang, Kun & Fu, Xiaowen, 2017. "Air transport services in regional Australia: Demand pattern, frequency choice and airport entry," Transportation Research Part A: Policy and Practice, Elsevier, vol. 103(C), pages 472-489.
    16. Fazıl Gökgöz & Fatma Demir, 2014. "An Efficiency Analysis For The European Telecommunication Sector," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 8(1), pages 141-158.
    17. Noel Uri, 2006. "A Note on the Technical and Allocative Efficiency of Local Exchange Carriers in the United States," Quality & Quantity: International Journal of Methodology, Springer, vol. 40(3), pages 383-406, June.
    18. Sang Lee & Shakil Quayes, 2005. "When is privatization better facilitated? Global evidence from the telecom sector," Global Economic Review, Taylor & Francis Journals, vol. 34(1), pages 119-127.
    19. Yu, Hang & Zhang, Yahua & Zhang, Anming & Wang, Kun & Cui, Qiang, 2019. "A comparative study of airline efficiency in China and India: A dynamic network DEA approach," Research in Transportation Economics, Elsevier, vol. 76(C).
    20. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    21. Guilhem Bascle, 2008. "Controlling for endogeneity with instrumental variables in strategic management research," Post-Print hal-00576795, HAL.
    22. Marijana Petrović & Nataša Bojković & Mladen Stamenković, 2018. "A Dea-Based Tool For Tracking Best Practice Exemplars: The Case Of Telecommunications In Ebrd Countries," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 63(218), pages 105-128, July – Se.
    23. Ros, Agustin J, 1999. "Does Ownership or Competition Matter? The Effects of Telecommunications Reform on Network Expansion and Efficiency," Journal of Regulatory Economics, Springer, vol. 15(1), pages 65-92, January.
    24. Gary Madden & Scott Savage, 2001. "Productivity Growth And Market Structure In Telecommunications," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 10(6), pages 493-512.
    25. Dyson, R. G. & Allen, R. & Camanho, A. S. & Podinovski, V. V. & Sarrico, C. S. & Shale, E. A., 2001. "Pitfalls and protocols in DEA," European Journal of Operational Research, Elsevier, vol. 132(2), pages 245-259, July.
    26. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    27. Y. Zhang, 2015. "Merger Between Airlines in Financial Distress: Does the Merger Save Them?," Competition and Regulation in Network Industries, Intersentia, vol. 16(1), pages 66-82, March.
    28. Belen Usero & Grigorios Asimakopoulos, 2013. "Productivity change and its determinants among leading mobile operators in Europe," Applied Economics, Taylor & Francis Journals, vol. 45(20), pages 2915-2925, July.
    29. M. Resende & L. O. Facanha, 2002. "Privatization and efficiency in Brazilian telecommunications: an empirical study," Applied Economics Letters, Taylor & Francis Journals, vol. 9(12), pages 823-826.
    30. Youssouf Kiendrebeogo & Alexandru Minea, 2017. "Financial Factors and Manufacturing Exports: Firm-Level Evidence From Egypt," Journal of Development Studies, Taylor & Francis Journals, vol. 53(12), pages 2197-2213, December.
    31. Lourdes Torres & Patricia Bachiller, 2013. "Efficiency of telecommunications companies in European countries," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 17(4), pages 863-886, November.
    32. W. Cooper & L. Seiford & K. Tone & J. Zhu, 2007. "Some models and measures for evaluating performances with DEA: past accomplishments and future prospects," Journal of Productivity Analysis, Springer, vol. 28(3), pages 151-163, December.
    33. Scott J. Wallsten, 2001. "An Econometric Analysis of Telecom Competition, Privatization, and Regulation in Africa and Latin America," Journal of Industrial Economics, Wiley Blackwell, vol. 49(1), pages 1-19, March.
    34. Taskin, Fatma & Zaim, Osman, 1997. "Catching-up and innovation in high- and low-income countries," Economics Letters, Elsevier, vol. 54(1), pages 93-100, January.
    35. Sunil Kumar, 2013. "Banking reforms and the evolution of cost efficiency in Indian public sector banks," Economic Change and Restructuring, Springer, vol. 46(2), pages 143-182, May.
    36. Steve R. Letza & Clive Smallman & Xiuping Sun, 2004. "Reframing privatisation: Deconstructing the myth of efficiency," Policy Sciences, Springer;Society of Policy Sciences, vol. 37(2), pages 159-183, June.
    37. Armando Calabrese & Domenico Campisi & Paolo Mancuso, 2002. "Productivity Change in the Telecommunications Industries of 13 OECD Countries," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 1(3), pages 209-223, December.
    38. Tsai, Hsiang-Chih & Chen, Chun-Mei & Tzeng, Gwo-Hshiung, 2006. "The comparative productivity efficiency for global telecoms," International Journal of Production Economics, Elsevier, vol. 103(2), pages 509-526, October.
    39. Viviane Y. Naimy & Cynthia Merheb, 2014. "Modeling the Efficiency of the Mobile Industry in the Middle East Using Data Envelopment Analysis," Journal of Statistical and Econometric Methods, SCIENPRESS Ltd, vol. 3(2), pages 1-6.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bielov, Constantine & Mitomo, Hitoshi & Hämmäinen, Heikki, 2022. "Efficiency frontier of OECD MNOs: Multinational vs Domestic," Telecommunications Policy, Elsevier, vol. 46(5).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. EZZAT Riham Ahmed, 2015. "Paving the Way for Better Telecom Performance: Evidence from the Telecommunication Sector in MENA Countries," Review of Network Economics, De Gruyter, vol. 14(3), pages 157-199, September.
    2. Riham Ahmed Ezzat, 2015. "Paving the way for better telecom performance: Evidence from the telecommunication sector in MENA countries," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01164199, HAL.
    3. Riham Ahmed Ezzat, 2015. "Paving the way for better telecom performance: Evidence from the telecommunication sector in MENA countries," Post-Print halshs-01164199, HAL.
    4. Gasmi, F. & Maingard, A. & Noumba, P. & Recuero Virto, L., 2013. "The Privatization of the Fixed-Line Telecommunications Operator in OECD, Latin America, Asia, and Africa: One Size Does Not Fit All," World Development, Elsevier, vol. 45(C), pages 189-208.
    5. Karamti, Chiraz, 2019. "Lopsided effects of telecom reforms on mobile markets in the enlarged EU: Evidence from dynamic quantile model," Telecommunications Policy, Elsevier, vol. 43(3), pages 238-261.
    6. Estache, Antonio & Goicoechea, Ana & Trujillo, Lourdes, 2009. "Utilities reforms and corruption in developing countries," Utilities Policy, Elsevier, vol. 17(2), pages 191-202, June.
    7. Jayakar, Krishna & Martin, Brandie, 2012. "Regulatory governance in African telecommunications: Testing the resource curse hypothesis," Telecommunications Policy, Elsevier, vol. 36(9), pages 691-703.
    8. Gutierrez, Luis H., 2003. "Regulatory governance in the Latin American telecommunications sector," Utilities Policy, Elsevier, vol. 11(4), pages 225-240, December.
    9. Estache, Antonio & Goicoechea, Ana & Manacorda, Marco, 2006. "Telecommunications performance, reforms, and governance," Policy Research Working Paper Series 3822, The World Bank.
    10. Gasmi, Farid & Recuero Virto, Laura, 2010. "The determinants and impact of telecommunications reforms in developing countries," Journal of Development Economics, Elsevier, vol. 93(2), pages 275-286, November.
    11. Zheng, Shilin & Ward, Michael R., 2011. "The effects of market liberalization and privatization on Chinese telecommunications," China Economic Review, Elsevier, vol. 22(2), pages 210-220, June.
    12. Garrone, Paola & Zaccagnino, Michele, 2015. "Seeking the links between competition and telecommunications investments," Telecommunications Policy, Elsevier, vol. 39(5), pages 388-405.
    13. I. Atiyas & P. Dogan, "undated". "Glass Half Empty? Politics and Institutions in the Liberalization of the Fixed Line Telecommunications in Turkey," Working Paper 33655, Harvard University OpenScholar.
    14. David Parker & Colin Kirkpatrick, 2005. "Privatisation in Developing Countries: A Review of the Evidence and the Policy Lessons," Journal of Development Studies, Taylor & Francis Journals, vol. 41(4), pages 513-541.
    15. Mohamad, Noorihsan, 2014. "Telecommunications reform and efficiency performance: Do good institutions matter?," Telecommunications Policy, Elsevier, vol. 38(1), pages 49-65.
    16. Shilin Zheng & Xinzhu Zhang, 2013. "The effect of the Chinese telecommunications reform on industrial growth: 1994–2007," Chapters, in: Michael Faure & Xinzhu Zhang (ed.), The Chinese Anti-Monopoly Law, chapter 7, pages 233-261, Edward Elgar Publishing.
    17. Lourdes Torres & Patricia Bachiller, 2013. "Efficiency of telecommunications companies in European countries," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 17(4), pages 863-886, November.
    18. Antonio Estache & L. Wren-Lewis, 2008. "Towards a Theory of Regulation for Developing Countries: Following Laffont's Lead," Working Papers ECARES 2008_018, ULB -- Universite Libre de Bruxelles.
    19. Victor John M. Cantor & Kim Leng Poh, 2020. "Efficiency measurement for general network systems: a slacks-based measure model," Journal of Productivity Analysis, Springer, vol. 54(1), pages 43-57, August.
    20. Vivien Foster & José Luis Guasch & Luis Andrés & Thomas Haven, 2008. "The Impact of Private Sector Participation in Infrastructure: Lights, Shadows, and the Road Ahead," IDB Publications (Books), Inter-American Development Bank, number 59818, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:telpol:v:44:y:2020:i:5:s0308596120300501. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.