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Measuring productivity change in telecommunications

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  • Uri, Noel D.

Abstract

Incentive regulation in the form of price caps is now an important regulatory tool in the telecommunications industry in the United States. As part of the implementation of incentive regulation, there is a need to measure accurately the change in productivity. In this paper an approach is introduced that not only provides a measure of the change in productivity but the technique also allows for a decomposition into two mutually exclusive and exhaustive components - changes in technical efficiency over time and shifts in technology over time. Using data on four output measures and six input measures for three time periods for 19 individual LECs, the indicate that productivity increased by about 34% between 1988 and 1998 or about 3.0% per year. This growth is due primarily to innovation rather than improvements in efficiency. Of the 19 LECs in the sample, 12 were operating efficiently throughout the entire 1988-1998 period. Of the remaining 7, 5 showed a slight improvement in efficiency while the efficiency of two declined. In the aggregate, however, efficiency improved. Finally, a comparison is made between two methods of estimating the change in productivity. The conventional-growth-accounting approach and the Malmquist index approach yield somewhat different results. Essentially the same data are used so that the primary difference is most likely in the technique applied.

Suggested Citation

  • Uri, Noel D., 2000. "Measuring productivity change in telecommunications," Telecommunications Policy, Elsevier, vol. 24(5), pages 439-452, June.
    • Handle: RePEc:eee:telpol:v:24:y:2000:i:5:p:439-452
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    Citations

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    Cited by:

    1. Wang, Wei-Kang & Lu, Wen-Min & Kweh, Qian Long & Lai, Hsiao-Wen, 2014. "Does corporate social responsibility influence the corporate performance of the U.S. telecommunications industry?," Telecommunications Policy, Elsevier, vol. 38(7), pages 580-591.
    2. Moreno, Plácido & Lozano, Sebastián & Gutiérrez, Ester, 2013. "Dynamic performance analysis of U.S. wireline telecommunication companies," Telecommunications Policy, Elsevier, vol. 37(6), pages 469-482.
    3. Chun‐Hsiung Liao & Diana B. González, 2009. "Comparing Operational Efficiency of Mobile Operators in Brazil, Russia, India and China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 17(5), pages 104-120, September.
    4. Lin, Xuchen & Lu, Ting-Jie & Chen, Xia, 2018. "Technological change and total factor productivity growth: evidence from China's telecommunications industry," 22nd ITS Biennial Conference, Seoul 2018. Beyond the boundaries: Challenges for business, policy and society 190363, International Telecommunications Society (ITS).
    5. Fazıl Gökgöz & Mustafa Taylan Güvercin, 2018. "Investigating the total factor productivity changes in the top ICT companies worldwide," Electronic Commerce Research, Springer, vol. 18(4), pages 791-811, December.
    6. Noel Uri, 2004. "The Impact of Incentive Regulation on Service Quality in Telecommunications in the United States," Quality & Quantity: International Journal of Methodology, Springer, vol. 38(3), pages 291-318, June.
    7. Massón-Guerra, José Luis, 2007. "Evolución de la Eficiencia Productiva de una empresa privatizada: El Caso del Grupo Telefónica de España [Productive Efficiency in Telefonica]," MPRA Paper 13463, University Library of Munich, Germany.
    8. Fazıl Gökgöz & Fatma Demir, 2014. "An Efficiency Analysis For The European Telecommunication Sector," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 8(1), pages 141-158.
    9. Noel Uri, 2003. "Service Quality Effects of Incentive Regulation on Access Service in Telecommunications in the United States," European Journal of Law and Economics, Springer, vol. 16(3), pages 369-390, November.
    10. Liao, Chun-Hsiung & Lin, Hsing-Yung, 2011. "Measuring operational efficiency of mobile operators in Japan and Korea," Japan and the World Economy, Elsevier, vol. 23(1), pages 48-57, January.
    11. Kang, Chao-Chung & Wu, Chin-Chia, 2013. "Statistical precision of productivity change: A bootstrap application to Taiwan’s telecommunications industry," Telecommunications Policy, Elsevier, vol. 37(11), pages 1015-1032.
    12. Uri, Noel D., 2002. "CLEC access charges and the problem of monopoly power," Journal of Policy Modeling, Elsevier, vol. 24(1), pages 51-65, March.
    13. Noel Uri & Florence Setzer, 2003. "Assessing the Performance of the Price Cap Plan for Local Exchange Carriers in the United States," European Journal of Law and Economics, Springer, vol. 15(3), pages 263-276, May.
    14. Noel Uri, 2001. "Productivity Change, Technical Progress, and Efficiency Improvement in Telecommunications," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 18(3), pages 283-300, May.
    15. Tsai, Hsiang-Chih & Chen, Chun-Mei & Tzeng, Gwo-Hshiung, 2006. "The comparative productivity efficiency for global telecoms," International Journal of Production Economics, Elsevier, vol. 103(2), pages 509-526, October.

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