Privatizing Monopolies in Developing Countries: The Real Effects of Exclusivity Periods in Telecommunications
AbstractWhen reforming their network utility industries, many developing countries give the newly-privatized incumbent exclusive rights to serve a particular market. These "exclusivity periods" are especially common in telecommunications. Research to date has explored the effects of privatization, competition, and to a lesser extent, regulation. We know very little, however, about the effects of the details of privatization transactions themselves and, in particular, how exclusivity periods matter. I use an original, new dataset to explore the costs and benefits of this approach to privatization. I find that exclusivity periods are associated with significant increases in the firm's sale price. The increased revenues to the government come with a cost, however. Exclusivity periods are correlated with a significant decrease in the incumbent's investment in the telecommunications network, payphones, mobile telephone penetration, and international calling.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Regulation2point0 in its series Working paper with number 284.
Date of creation: Aug 2003
Date of revision:
Contact details of provider:
Web page: http://regulation2point0.org/
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Azam, Jean-Paul & Dia, Magueye & N'Guessan, Tchetche, 2002. "Telecommunications sector reforms in Senegal," Policy Research Working Paper Series 2894, The World Bank.
- Noll, Roger G., 1999. "Telecommunications Reform in Developing Countries," Working paper 527, Regulation2point0.
- Colin Xu, Lixin & Li, Wei & Zhen-Wei Qiang, Christine, 2001.
"The Political Economy of Privatization and Competition: Cross-Country Evidence from the Telecommunications Sector,"
CEPR Discussion Papers
2825, C.E.P.R. Discussion Papers.
- Li, Wei & Xu, Lixin Colin, 2002. "The Political Economy of Privatization and Competition: Cross-Country Evidence from the Telecommunications Sector," Journal of Comparative Economics, Elsevier, vol. 30(3), pages 439-462, September.
- Jones, Siôn & Jones, Pau, 2006. "e-Communications: Investment and the Regulatory Framework," MPRA Paper 3568, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Archive Maintainer).
If references are entirely missing, you can add them using this form.