The Impact of Privatization and Competition in the Telecommunications Sector Around the World

Posted: 15 Sep 2004

See all articles by Wei Li

Wei Li

University of Virginia - Darden School of Business; Centre for Economic Policy Research (CEPR)

Lixin Colin Xu

World Bank - Development Research Group (DECRG)

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Abstract

Using a comprehensive country-level panel data set covering the period from 1990 to 2001, we investigate the impact of privatization and competition in the telecommunications sector around the world. Full privatization, which gave private owners control rights, contributed substantially to improving allocation of labor and capital, expanding service output and network penetration, and improving labor and total factor productivities. But partial privatization, which retained the state's control rights, showed no significant impact. The increase in competitive pressure contributed substantially to growth in the sector by raising both factor inputs and total factor productivity. We also found evidence of complementarity between privatization and competition in deepening network penetration and in restraining the rise of service pricing among privatized operators. Our results are robust to plausible alternative specifications.

Suggested Citation

Li, Wei and Xu, Lixin Colin, The Impact of Privatization and Competition in the Telecommunications Sector Around the World. Journal of Law and Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=590342

Wei Li (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
804-243-7691 (Phone)
804-243-7681 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/li.htm

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Lixin Colin Xu

World Bank - Development Research Group (DECRG) ( email )

1818 H Street, N.W.
MC 3-427
Washington, DC 20433
United States
202-473-4664 (Phone)
202-522-1155 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/cxu

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