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Benchmarking and effects of reforms in the fixed telecommunications industry: A DDF approach

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  • Bruno, Clementina
  • Manello, Alessandro

Abstract

Our article proposes an application of the Directional Distance Function (DDF) approach to the fixed telecommunication field. In particular, we present an efficiency evaluation of European fixed telecom operators, where the DDF tool allows for asymmetric treatment of outputs characterized by a different degree of desirability: broadband lines (a market still in expansion, related to a welfare-improving service) and narrow band lines (an almost saturated market, corresponding to a “minimal” TLC service in developed countries). Finally, by means of a second stage regression, we investigate the effect on technical efficiency of set of variables representing the competitive environment, the ownership structure and the degree of vertical separation. Our results show that the assumptions embedded in the DDF model influence relevantly the technical efficiency estimates, where important potential bias can arise if the duality of outputs is ignored, with a subsequent relevant impact also on the second stage results. These findings highlight the relevance of choosing benchmarking models consistent with the features of the analysed technology and show that the DDF approach is a flexible tool able to accommodate even complex output structures.

Suggested Citation

  • Bruno, Clementina & Manello, Alessandro, 2015. "Benchmarking and effects of reforms in the fixed telecommunications industry: A DDF approach," Telecommunications Policy, Elsevier, vol. 39(2), pages 127-139.
  • Handle: RePEc:eee:telpol:v:39:y:2015:i:2:p:127-139
    DOI: 10.1016/j.telpol.2014.12.009
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    Cited by:

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    2. Fabian Queder, 2020. "Towards a vertically separated broadband infrastructure: The potential role of voluntary separation," Competition and Regulation in Network Industries, , vol. 21(2), pages 143-165, June.
    3. Alessandro Manello & Maurizio Cisi & Francesco Devicienti & Davide Vannoni, 2020. "Networking: a business for women," Small Business Economics, Springer, vol. 55(2), pages 329-348, August.
    4. Emrouznejad, Ali & Yang, Guo-liang, 2016. "A framework for measuring global Malmquist–Luenberger productivity index with CO2 emissions on Chinese manufacturing industries," Energy, Elsevier, vol. 115(P1), pages 840-856.
    5. Devicienti, Francesco & Manello, Alessandro & Vannoni, Davide, 2017. "Technical efficiency, unions and decentralized labor contracts," European Journal of Operational Research, Elsevier, vol. 260(3), pages 1129-1141.
    6. Sueyoshi, Toshiyuki & Li, Aijun & Liu, Xiaohong, 2019. "Exploring sources of China's CO2 emission: Decomposition analysis under different technology changes," European Journal of Operational Research, Elsevier, vol. 279(3), pages 984-995.

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