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Determinants of Competition in a Context of Services Trade Liberalization: Analysis of Market Power of Firms in African Telecommunications Industry

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  • Calvin, Djiofack Zebaze

Abstract

This paper assesses the determinant of market power in telecommunications industry in Africa using multiple-indicator-multiple-causes (MIMIC) of a single latent variable estimation. Based on aggregated data from 30 African countries between 1997 and 2004, three sets of results emerge from our empirical analysis: the African telecommunications industry face significant market power practices. Three main policy factors seem to be affecting negatively this market power: the unilateral efforts in terms of liberalization (increasing in number of operators) as well as strengthening of sectoral regulation, and the multilateral commitments to liberalize in the framework of the GATS. However, it appears that multimarket contact of telecommunications operators is an important factor enhancing the cooperative pricing behavior.

Suggested Citation

  • Calvin, Djiofack Zebaze, 2008. "Determinants of Competition in a Context of Services Trade Liberalization: Analysis of Market Power of Firms in African Telecommunications Industry," Conference papers 330242, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:330242
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