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Technical Change, Markup, Divestiture, And Productivity Growth In The U.S. Telecommunications Industry

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  • M. Ishaq Nadiri
  • Banani Nandi

Abstract

This paper examines the sources of productivity growth for the U.S. telecommunications industry from 1935 to 1987. These years encompass both the pre- and post-AT&T divestiture periods. We formulate a structural model that accounts for both changes in the cost and the demand side of the industry. We measure the contributions of aggregate demand, information intensity of the economy, price-cost margins, relative factor prices, direct and indirect effects of technological progress, and R&D investment on total-factor productivity (TFP) growth rate. We show that TFP growth rate as conventionally measured is a seriously biased measure of rate of technical change in this industry. © 1999 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

Suggested Citation

  • M. Ishaq Nadiri & Banani Nandi, 1999. "Technical Change, Markup, Divestiture, And Productivity Growth In The U.S. Telecommunications Industry," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 488-498, August.
  • Handle: RePEc:tpr:restat:v:81:y:1999:i:3:p:488-498
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    Cited by:

    1. Bloch, Harry & Tang, Sam Hak Kan, 2007. "The effects of exports, technical change and markup on total factor productivity growth: Evidence from Singapore's electronics industry," Economics Letters, Elsevier, vol. 96(1), pages 58-63, July.
    2. Rohman, Ibrahim Kholilul & Bohlin, Erik, 2014. "Decomposition analysis of the telecommunications sector in Indonesia: What does the cellular era shed light on?," Telecommunications Policy, Elsevier, vol. 38(3), pages 248-263.
    3. Rohman, Ibrahim Kholilul, 2013. "The globalization and stagnation of the ICT sectors in European countries: An input-output analysis," Telecommunications Policy, Elsevier, vol. 37(4), pages 387-399.
    4. Hyunbae Chun & M. Ishaq Nadiri, 2008. "Decomposing Productivity Growth in the U.S. Computer Industry," The Review of Economics and Statistics, MIT Press, vol. 90(1), pages 174-180, February.

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