Regulation and Performance: Evidence from the Telecommunications Industry

This thesis proposes an empirical analysis of performance in the telecommunications industry, in relation to the regulatory framework in place in the sector. We first provide an introduction and overview of the related literature on performance measurement and regulatory institutions. Chapters 1 and 2 focus on level measures of productivity components and, in particular, of technical change and efficiency. This analysis is motivated by the form of incentive regulation in force in the industry, which links future price increases allowed by the regulator to certain measures of the operators performance. Chapter 1 investigates embodied technical change in the U.S. industry relying on rm-level panel data It builds on the definition of capital as a sum of vintages of different qualities and incorporates this definition into a cost function. Estimates of embodied technical change in this sample vary depending on the specification, but do not appear large enough to affect productivity. Chapter 2 analyses the variation of efficiency over time in the same sample of U.S. operators. This is done by applying estimators that allow for (freely) time-varying efficiency to an input stochastic distance function. Estimates confirm that standard panel estimators, which are commonly used by regulators to assess relative efficiency, do not adequately capture the time-varying component of efficiency. Finally, Chapter 3 studies how cross-country differences in sector performance, measured in terms of access to mobile networks, can be explained by regulatory and country governance. In particular, using a system approach, it considers whether the impact of regulatory governance on penetration can be an indirect result of country institutions. In addition, feedback effects between access to infrastructure and income are incorporated in the analysis. The analysis is carried out on a panel of low and middle-income countries. The empirical results show that the establishment of a separate telecommunications regulator is associated to higher penetration levels, and that this is more important for low-income countries. The effect is partly related to the quality of wider country governance rather than sector specific institutions.

Name dc:type.qualificationname

phd

Level dc:type.qualificationlevel

doctoral

Grantor dc:publisher.institution

City University London

Year dc:date.issued

2009

Author dc:creator

• Maiorano, F.

• HB Economic Theory