The Welfare Impact of a Privatization: The British Telecom Case-History

UniversitĂ  degli Studi di Milano Dipartimento di economia politica e aziendale working paper n.08.2001

38 Pages Posted: 21 Feb 2003

See all articles by Massimo Florio

Massimo Florio

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM)

Date Written: June 2001

Abstract

In this paper we offer and discuss new evidence on the performance of British Telecom before and after privatisation. We use a unique dataset based on company accounts over forty years (1960-1999), and original additional company data on several variables. We focus particularly on output, prices, revenues, costs, employment, productivity, profits and investments. Our key-finding is that operative profits were remarkably stable before and after divestiture, and that ownership change per se had little discernible impact on productivity trends, particularly between 1984-1991. Major changes in performance after 1991 were however related to variations in financial arrangements, competition and regulatory pressure. This allows us to look at the BT case history as a natural experiment on the relative importance of privatisation, liberalization, and regulation.

JEL Classification: L32, L33, L5, M54

Suggested Citation

Florio, Massimo, The Welfare Impact of a Privatization: The British Telecom Case-History (June 2001). UniversitĂ  degli Studi di Milano Dipartimento di economia politica e aziendale working paper n.08.2001. Available at SSRN: https://ssrn.com/abstract=376141 or http://dx.doi.org/10.2139/ssrn.376141

Massimo Florio (Contact Author)

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM) ( email )

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I-20122 Milano, 20122
Italy
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+39 02 50321505 (Fax)

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