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Regulation, market structure and performance in telecommunications

Author

Listed:
  • Olivier Boylaud
  • Giuseppe Nicoletti

Abstract

The paper uses an international database on regulation, market structure and performance in the telecommunications industry to investigate the effects of entry liberalisation and privatisation on productivity, prices and quality of service in long-distance (domestic and international) and mobile cellular telephony services in 23 OECD countries over the 1991-1997 period. The data on regulation and market structure is analysed by means of factor analysis techniques in order to group countries according to their policy and market environments. Controlling for technology developments and differences in economic structure, panel data estimates show that prospective competition (as proxied by the number of years remaining to liberalisation) and effective competition (as proxied by the share of new entrants or by the number of competitors) both bring about productivity and quality improvements and reduce the prices of all the telecommunications services considered in the analysis. No clear evidence could be found concerning the effects on performance of the ownership structure of the industry (as proxied by both the public share in the public telecommunications operators and years remaining to privatisation).

Suggested Citation

  • Olivier Boylaud & Giuseppe Nicoletti, 2003. "Regulation, market structure and performance in telecommunications," OECD Economic Studies, OECD Publishing, vol. 2001(1), pages 99-142.
    • Handle: RePEc:oec:ecokaa:5lmqcr2k29g6
    DOI: 10.1787/eco_studies-v2001-art4-en
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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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