Regulation, market structure and service trade liberalization
AbstractIn this paper, we develop a method to quantify the importance of regulation and market structure on the success of trade liberalization. For this purpose, we incorporate a single imperfectly competitive service sector that can take on various market structures into a standard computational general equilibrium model. We apply our framework to analyze the impact of allowing a single foreign telecom provider to enter Tunisia. If the regulation environment guarantees competition, Tunisiaâs welfare can improve up to 0.65 percent. If a cartel is formed between the domestic incumbent and foreign entrant, however, Tunisiaâs welfare can drop up to 0.25 percent. Our results thus call for Tunisia among other developing countries to step up its procompetitive regulatory reforms while liberalizing its telecom sector. Dans ce papier, nous dÃ©veloppons une mÃ©thode permettant de quantifier lâimportance de la rÃ©glementation et de la structure des marchÃ©s sur la libÃ©ralisation du commerce et sur son succÃ¨s. Ã ces fins, nous incorporons un secteur unique et imparfaitement compÃ©titif pouvant intÃ©grer diffÃ©rentes structures de marchÃ© dans un modÃ¨le standard de calcul dâÃ©quilibre gÃ©nÃ©ral. Nous appliquons notre cadre dâanalyse afin dâÃ©tudier lâimpact de lâentrÃ©e dâun seul fournisseur Ã©tranger en Tunisie. Nous trouvons que si la rÃ©glementation du marchÃ© y garantit la compÃ©tition, le bien-Ãªtre de la Tunisie peut augmenter de 0,65 %. Cependant, sâil y a formation dâun cartel entre le rÃ©seau domestique et lâentrant Ã©tranger, le bien-Ãªtre de la Tunisie peut baisser de 0,25 %. Nos rÃ©sultats dÃ©montrent que tout en libÃ©ralisant son secteur des tÃ©lÃ©communications, la Tunisie bÃ©nÃ©ficierait de rÃ©formes visant des rÃ©gulations pro-compÃ©titives.
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Bibliographic InfoArticle provided by Elsevier in its journal Economic Modelling.
Volume (Year): 24 (2007)
Issue (Month): 6 (November)
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Web page: http://www.elsevier.com/locate/inca/30411
Other versions of this item:
- Denise Eby Konan & Ari Van Assche, 2006. "Regulation, Market Structure and Service Trade Liberalization," CIRANO Working Papers 2006s-18, CIRANO.
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
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