The impact of incentive regulation on productivity in the US telecommunications industry: A stochastic frontier approach
AbstractThis paper investigates whether the substitution of price cap regulation (PCR) and other forms of incentive regulation for traditional rate of return regulation (RRR) has had a measurable effect on productivity growth in the US telecommunications industry. A stochastic frontier approach is employed to compute the efficiency change, technological progress, and productivity growth for 25 LECs over the 1988-1998 time periods. By examining the relationship between the change in productivity growth and regulatory regime variables and other control variables, we find that PCR has a significant and positive effect, both in contemporaneous and lagged specifications.
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Bibliographic InfoArticle provided by Elsevier in its journal Information Economics and Policy.
Volume (Year): 23 (2011)
Issue (Month): 1 (March)
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Web page: http://www.elsevier.com/locate/inca/505549
Productivity growth Stochastic frontier model Incentive regulation;
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- Resende, Marcelo, 1999. "Productivity growth and regulation in U.S. local telephony," Information Economics and Policy, Elsevier, vol. 11(1), pages 23-44, March.
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- Ai, Chunrong & Sappington, David E M, 2002. "The Impact of State Incentive Regulation on the U.S. Telecommunications Industry," Journal of Regulatory Economics, Springer, vol. 22(2), pages 133-59, September.
- Weisman, Dennis L, 1993. "Superior Regulatory Regimes in Theory and Practice," Journal of Regulatory Economics, Springer, vol. 5(4), pages 355-66, December.
- Noel D. Uri, 2002. "Measuring the change in productive efficiency in telecommunications in the USA," Journal of Economic Studies, Emerald Group Publishing, vol. 29(2), pages 151-167, May.
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