IDEAS home Printed from https://ideas.repec.org/a/kap/iaecre/v12y2006i4p505-52210.1007-s11294-006-9046-y.html
   My bibliography  Save this article

Traditional and Non-Traditional Determinants of Accounting Rates in International Telecommunications

Author

Listed:
  • Simran Kahai
  • Paramjit Kahai
  • Adrian Leigh

Abstract

The accounting rate system currently in place is used to reimburse telephone companies around the world for terminating calls originating in foreign countries. Increased competition in more liberalized countries has led to imbalances between traffic originating in these countries and traffic coming in from less liberalized countries, leading to huge settlement payments being made to less liberalized countries. Some variation in accounting rates across countries can be explained by traditional factors such as the actual cost of terminating calls. Our results suggest that accounting rates are also significantly affected by non-traditional factors such as the extent of government regulation, the level of corruption, and the like. These findings support the need for consideration of these factors in reforming the accounting rate system currently in place. “High settlement rates are a product of oligopolistic cooperation in a market with little transparency and anti-competitive regulation in the majority of nations” [Cowhey, 1998 ; p. 908]. Copyright IAES 2006

Suggested Citation

  • Simran Kahai & Paramjit Kahai & Adrian Leigh, 2006. "Traditional and Non-Traditional Determinants of Accounting Rates in International Telecommunications," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 12(4), pages 505-522, November.
    • Handle: RePEc:kap:iaecre:v:12:y:2006:i:4:p:505-522:10.1007/s11294-006-9046-y
    DOI: 10.1007/s11294-006-9046-y
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11294-006-9046-y
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11294-006-9046-y?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Munoz, Teresa Garin & Amaral, Teodosio Perez, 1996. "Demand for international telephone traffic in Spain: An econometric study using provincial panel data," Information Economics and Policy, Elsevier, vol. 8(4), pages 289-315, December.
    2. Scanlan, Mark, 1996. "Why is the international accounting rate system in terminal decline, and what might be the consequences?," Telecommunications Policy, Elsevier, vol. 20(10), pages 739-753, December.
    3. Cowhey, Peter, 1998. "FCC benchmarks and the reform of the international telecommunications market," Telecommunications Policy, Elsevier, vol. 22(11), pages 899-911, December.
    4. Cave, Martin & Donnelly, Mark P., 1996. "The pricing of international telecommunications services by monopoly operators," Information Economics and Policy, Elsevier, vol. 8(2), pages 107-123, June.
    5. World Bank, 2002. "World Development Indicators 2002," World Bank Publications - Books, The World Bank Group, number 13921, December.
    6. World Bank, 2004. "World Development Indicators 2004," World Bank Publications - Books, The World Bank Group, number 13890, December.
    7. Ergas, Henry & Paterson, Paul, 1991. "International telecommunications settlement arrangements : An unsustainable inheritance?," Telecommunications Policy, Elsevier, vol. 15(1), pages 29-48, February.
    8. Hackl, Peter & Westlund, Anders H., 1995. "On price elasticities of international telecommunication demand," Information Economics and Policy, Elsevier, vol. 7(1), pages 27-36, April.
    9. Hakim, Sam Ramsey & Lu, Ding, 1993. "Monopolistic settlement agreements in international telecommunications," Information Economics and Policy, Elsevier, vol. 5(2), pages 145-157, July.
    10. Wright, Julian, 1999. "International Telecommunications, Settlement Rates, and the FCC," Journal of Regulatory Economics, Springer, vol. 15(3), pages 267-291, May.
    11. Wallsten, Scott J, 2001. "Telecommunications Investment and Traffic in Developing Countries: The Effects of International Settlement Rate Reforms," Journal of Regulatory Economics, Springer, vol. 20(3), pages 307-323, November.
    12. Frieden, Rob, 1998. "Falling through the cracks: International accounting rate reform at the ITU and WTO," Telecommunications Policy, Elsevier, vol. 22(11), pages 963-975, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:kap:iaecre:v:12:y:2006:i:4:p:505-522 is not listed on IDEAS
    2. Einhorn, Michael A., 2002. "International telephony: a review of the literature," Information Economics and Policy, Elsevier, vol. 14(1), pages 51-73, March.
    3. James Alleman & Gary Madden & Scott Savage, 2003. "Dominant carrier market power in US international telephone markets," Applied Economics, Taylor & Francis Journals, vol. 35(6), pages 665-673.
    4. repec:kap:iaecre:v:12:y:2006:i:1:p:131-137 is not listed on IDEAS
    5. Armstrong, Mark, 2001. "The theory of access pricing and interconnection," MPRA Paper 15608, University Library of Munich, Germany.
    6. Christos Agiakloglou & Demetrius Yannelis, 2006. "Estimation of Price Elasticities for International Telecommunications Demand," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 12(1), pages 131-137, February.
    7. Gary Madden & Scott J. Savage, 2000. "Market Structure, Competition, and Pricing in United States International Telephone Service Markets," The Review of Economics and Statistics, MIT Press, vol. 82(2), pages 291-296, May.
    8. Madden, Gary & Savage, Scott J. & Coble-Neal, Grant, 2002. "Forecasting United States-Asia international message telephone service," International Journal of Forecasting, Elsevier, vol. 18(4), pages 523-543.
    9. Mansyur, Carol & Amick, Benjamin C. & Harrist, Ronald B. & Franzini, Luisa, 2008. "Social capital, income inequality, and self-rated health in 45 countries," Social Science & Medicine, Elsevier, vol. 66(1), pages 43-56, January.
    10. James Alleman & Gary Madden & Scott Savage, 2000. "Trade imbalance in international message telephone services," Applied Economics, Taylor & Francis Journals, vol. 32(10), pages 1311-1321.
    11. Martha Garcia-Murillo, 2003. "Assessing The Impact Of Internet Telephony On The Deployment Of Telecommunications Infrastructure," Working Papers 03-04, NET Institute, revised Feb 2004.
    12. Chyi, Yih-Luan & Hwang, Chun-Sin, 2011. "Development of domestic markets and poverty reduction for poor developing economies," Economic Modelling, Elsevier, vol. 28(1), pages 374-381.
    13. Mario Polèse, 2005. "Cities and National Economic Growth: A Reappraisal," Urban Studies, Urban Studies Journal Limited, vol. 42(8), pages 1429-1451, July.
    14. Garbacz, Christopher & Thompson, Herbert Jr., 2005. "Universal telecommunication service: A world perspective," Information Economics and Policy, Elsevier, vol. 17(4), pages 495-512, October.
    15. Galbi, Douglas A., 1998. "Cross-border rent shifting in international telecommunications1," Information Economics and Policy, Elsevier, vol. 10(4), pages 515-536, December.
    16. Basalisco, Bruno, 2012. "The effect of user interaction on the demand for mobile text messages: Evidence from cross-country data," Information Economics and Policy, Elsevier, vol. 24(2), pages 132-144.
    17. Christos Agiakloglou & Michael Polemis, 2018. "Evaluating the liberalization process on Telecommunications services for EU countries," Economics and Business Letters, Oviedo University Press, vol. 7(3), pages 98-107.
    18. Yun, Kyoung-Lim & Choi, Hyun-Woo & Ahn, Byong-Hun, 1997. "The accounting revenue division in international telecommunications: Conflicts and inefficiencies," Information Economics and Policy, Elsevier, vol. 9(1), pages 71-92, March.
    19. Mayo, John W. & Ukhaneva, Olga, 2017. "International telecommunications demand," Information Economics and Policy, Elsevier, vol. 39(C), pages 26-35.
    20. Pertti Haaparanta & Heli Virta, 2006. "Decomposing Growth: Do Low-Income and HIPCs Differ from High-Income Countries?: Growth, Technological Catch-up, Technological Change and Human and Physical Capital Deepening," WIDER Working Paper Series RP2006-26, World Institute for Development Economic Research (UNU-WIDER).
    21. Heng Ju & Guofu Tan, 2016. "Bilateral Market Structures And Regulatory Policies In International Telephone Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57(2), pages 393-424, May.
    22. Rashmi Banga, 2005. "Critical issues in India's services-led growth," Indian Council for Research on International Economic Relations, New Delhi Working Papers 171, Indian Council for Research on International Economic Relations, New Delhi, India.

    More about this item

    Keywords

    L96;

    JEL classification:

    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:iaecre:v:12:y:2006:i:4:p:505-522:10.1007/s11294-006-9046-y. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.