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How Regulation and Enforcement of Competition Affects ICT Productivity : Evidence from MatchedRegulatory-Production Surveys in Peru’s ICT Sector

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  • Arayavechkit,Tanida
  • Jooste,Charl
  • Urrutia Arrieta,Ana Francisca

Abstract

How the enforcement of competition regulation of information and communications technologyaffects growth depends on how well firms adapt to competitive pressure. This paper tests this empiricallyusing Peruvian firm-level data matched to a compilation of information and communications technology regulations andcompetition enforcement cases over 10 years. Based on the theoretical dispersion in markups, the paper shows that byincreasing productivity, leaders in a market can avoid the effects of competition while maintaining market share.However, much depends on the regulatory structure, which affects productive firms differently depending on how longthey have been in business. Highly productive older firms translate regulations that make processes more complex (suchas raising quality standards) into more productivity; productive younger firms benefit more from simplifying rulesthat facilitate competition through lower entry barriers and improved operating conditions. This feature is consistentacross different segments of the information and communications technology sector.

Suggested Citation

  • Arayavechkit,Tanida & Jooste,Charl & Urrutia Arrieta,Ana Francisca, 2022. "How Regulation and Enforcement of Competition Affects ICT Productivity : Evidence from MatchedRegulatory-Production Surveys in Peru’s ICT Sector," Policy Research Working Paper Series 10151, The World Bank.
    • Handle: RePEc:wbk:wbrwps:10151
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