IDEAS home Printed from https://ideas.repec.org/a/bpj/rneart/v13y2014i3p271-302n1.html
   My bibliography  Save this article

Regulatory Environment and Firm Performance in EU Telecommunications Services

Author

Listed:
  • Montolio Daniel

    (Faculty of Economics and Business, University of Barcelona (UB) Av Diagonal, 690 08034 Barcelona, Spain; and Barcelona, Institute of Economics, Carrer Tinent Coronel Valenzuela, 11, 08034 Barcelona, Spain)

  • Trillas Francesc

    (Public-Private Sector Research Center, IESE Barcelona, Barcelona, Spain; and Barcelona Institute of Economics, Carrer Tinent Coronel Valenzuela, 11, 08034 Barcelona, España)

  • Trujillo-Baute Elisa

    () (University of Warwick – Warwick Business School, Room B2.01, Warwick Business School, The University of Warwick, Coventry CV4 7AL, UK)

Abstract

We empirically estimate the effects of regulated access prices and firms’ multinational status on firm performance by using firm, corporate group, and country level information for the European broadband market between 2002 and 2010. Three measures of firm performance are used, namely: market share, revenue and productivity. Special attention is paid to differences in the impact on the performance measures depending on a firm’s position as either a market incumbent or entrant. We find that while access prices have a negative effect on entrants’ market share and revenue, the effect on incumbents’ market share, revenue and productivity is positive. Further, we find that multinational entrants perform better than national entrants in terms of their market share but worse in terms of their revenue and productivity. The opposite is true of incumbent multinationals which perform better than nationals in terms of their revenue and productivity but worse in terms of their market share. This confirms that a firm’s multinational status has a significant impact on its performance, and that this impact differs for incumbents and entrants. Finally, when evaluating the impact of access prices on firm performance at the mean performance of national and multinational firms, we find that the impact of access prices is lower for multinational than for national firms.

Suggested Citation

  • Montolio Daniel & Trillas Francesc & Trujillo-Baute Elisa, 2014. "Regulatory Environment and Firm Performance in EU Telecommunications Services," Review of Network Economics, De Gruyter, vol. 13(3), pages 271-302, September.
  • Handle: RePEc:bpj:rneart:v:13:y:2014:i:3:p:271-302:n:1
    as

    Download full text from publisher

    File URL: https://www.degruyter.com/view/j/rne.2014.13.issue-3/rne-2014-0030/rne-2014-0030.xml?format=INT
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

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

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gerpott, Torsten J. & Jakopin, Nejc M., 2007. "Firm and target country characteristics as factors explaining wealth creation from international expansion moves of mobile network operators," Telecommunications Policy, Elsevier, vol. 31(2), pages 72-92, March.
    2. Mattia Nardotto & Tommaso Valletti & Frank Verboven, 2015. "Unbundling The Incumbent: Evidence From Uk Broadband," Journal of the European Economic Association, European Economic Association, vol. 13(2), pages 330-362, April.
    3. Lenn Gomes & Kannan Ramaswamy, 1999. "An Empirical Examination of the Form of the Relationship Between Multinationality and Performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 30(1), pages 173-187, March.
    4. de Bijl, Paul W.J. & Peitz, Martin, 2005. "Local Loop Unbundling in Europe: Experience, Prospects and Policy Challenges," MPRA Paper 2441, University Library of Munich, Germany.
    5. Choi, In, 2001. "Unit root tests for panel data," Journal of International Money and Finance, Elsevier, vol. 20(2), pages 249-272, April.
    6. Michał Grajek & Lars-Hendrik Röller, 2012. "Regulation and Investment in Network Industries: Evidence from European Telecoms," Journal of Law and Economics, University of Chicago Press, vol. 55(1), pages 189-216.
    7. Jan Johanson & Jan-Erik Vahlne, 2009. "The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(9), pages 1411-1431, December.
    8. David Sappington, 2006. "Regulation in Vertically-Related Industries: Myths, Facts, and Policy," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 28(1), pages 3-16, February.
    9. Koutroumpis, Pantelis, 2009. "The economic impact of broadband on growth: A simultaneous approach," Telecommunications Policy, Elsevier, vol. 33(9), pages 471-485, October.
    10. David J. Denis & Diane K. Denis & Keven Yost, 2002. "Global Diversification, Industrial Diversification, and Firm Value," Journal of Finance, American Finance Association, vol. 57(5), pages 1951-1979, October.
    11. Mark Armstrong & David E.M. Sappington, 2006. "Regulation, Competition and Liberalization," Journal of Economic Literature, American Economic Association, vol. 44(2), pages 325-366, June.
    12. Carlo Cambini & Laura Rondi, 2012. "Capital structure and investment in regulated network utilities: evidence from EU telecoms," Industrial and Corporate Change, Oxford University Press, vol. 21(1), pages 31-71, February.
    13. Gerpott, Torsten J. & Jakopin, Nejc M., 2005. "The degree of internationalization and the financial performance of European mobile network operators," Telecommunications Policy, Elsevier, vol. 29(8), pages 635-661, September.
    14. Jakopin, Nejc M., 2008. "Internationalisation in the telecommunications services industry: Literature review and research agenda," Telecommunications Policy, Elsevier, vol. 32(8), pages 531-544, September.
    15. MB Sarkar & S Tamer Cavusgil & Preet S Aulakh, 1999. "International Expansion of Telecommunication Carriers: The Influence of Market Structure, Network Characteristics, and Entry Imperfections," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 30(2), pages 361-381, June.
    16. Einhorn, Michael A., 2002. "International telephony: a review of the literature," Information Economics and Policy, Elsevier, vol. 14(1), pages 51-73, March.
    17. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
    18. Valletti, Tommaso M., 0. "The theory of access pricing and its linkage with investment incentives," Telecommunications Policy, Elsevier, vol. 27(10-11), pages 659-675, November.
    19. Keiichi Hori & Keizo Mizuno, 2009. "Competition schemes and investment in network infrastructure under uncertainty," Journal of Regulatory Economics, Springer, vol. 35(2), pages 179-200, April.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

    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:bpj:rneart:v:13:y:2014:i:3:p:271-302:n:1. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla). General contact details of provider: https://www.degruyter.com .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.