Productivity Growth in Telecommunications: The Case of Tennessee
AbstractA divisia index of total factor productivity (TFP) growth is calculated for each of 16 regulated local telephone companies operating in Tennessee over the years 1989 through 1993. Year over year changes in TFP, in Tornqvist form, yield a growth in total factor productivity estimate for each company. These growth rates, however, contain the effects of both scale and technical change. Using the method suggested by Caves and Christensen, the effects are decomposed indirectly by regressing the annual percentage changes in TFP growth against measures of scale, service density, and network size. The results are consistent with the findings of economies of density and nearly constant returns to scale prevalent in the telecommunications literature.
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Bibliographic InfoPaper provided by Middle Tennessee State University, Department of Economics and Finance in its series Working Papers with number 200714.
Date of creation: Aug 2007
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Web page: http://www.mtsu.edu/~berc/working/Economics_Working_Papers.html
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total factor productivity; telecommunications; network size;
Find related papers by JEL classification:
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
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- Staranczak, Genio A. & Sepulveda, Edgardo R. & Dilworth, Peter A. & Shaikh, Shafi A., 1994. "Industry structure, productivity and international competitiveness: the case of telecommunications," Information Economics and Policy, Elsevier, vol. 6(2), pages 121-142, July.
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- Garrone, Paola, 1996. "Network subscription and services usage in European telecommunications industries," Information Economics and Policy, Elsevier, vol. 8(1), pages 25-50, March.
- Gasmi, F & Laffont, Jean-Jacques & Sharkey, W W, 1997. "Incentive Regulation and the Cost Structure of the Local Telephone Exchange Network," Journal of Regulatory Economics, Springer, vol. 12(1), pages 5-25, July.
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