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Explaining Telecoms and Electricity Internationalization in the European Union: A Political Economy Perspective

Author

Listed:
  • Clifton, Judith
  • Díaz-Fuentes, Daniel
  • Revuelta, Julio

Abstract

One consequence of the liberalization of certain services in the European Union was that a number of formerly inward-looking incumbents in telecommunications and electricity rapidly transformed themselves into some of the world’s leading Multinationals. However, the precise relationship between liberalization and incumbent internationalization is contested. This article tests three persuasive arguments derived from the political economy literature on this relationship. The first claims that those incumbents most exposed to domestic liberalization would internationalise most. The second asserts the opposite: incumbents operating where liberalization was restricted could exploit monopolistic rents to finance their aggressive internationalisation. The third argument claims that a diversity of paths will be adopted by countries and incumbents vis-à-vis liberalization and internationalization. Using correlation and cluster analysis of the sample of all major EU telecoms and electricity incumbent Multinationals evidence is found in favour of the third hypothesis. Internationalization as a response to liberalization took diverse forms in terms of timing and extent and this is best explained using a country, sector and firm logic.

Suggested Citation

  • Clifton, Judith & Díaz-Fuentes, Daniel & Revuelta, Julio, 2009. "Explaining Telecoms and Electricity Internationalization in the European Union: A Political Economy Perspective," MPRA Paper 33037, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:33037
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    File URL: https://mpra.ub.uni-muenchen.de/33037/1/MPRA_paper_33037.pdf
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    References listed on IDEAS

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    Cited by:

    1. Sterlacchini, Alessandro, 2012. "Energy R&D in private and state-owned utilities: An analysis of the major world electric companies," Energy Policy, Elsevier, vol. 41(C), pages 494-506.

    More about this item

    Keywords

    Electricity; European Union; Internationalization; Liberalization; Telecommunications; Political Economy; Multinational Corporations; National Champions;

    JEL classification:

    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L53 - Industrial Organization - - Regulation and Industrial Policy - - - Enterprise Policy
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • H82 - Public Economics - - Miscellaneous Issues - - - Governmental Property

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