Telecommunications industry efficiency: A comparative analysis of high and middle income countries

Article

Oredegbe, Abayomi and Zhang, Yahua. 2020. "Telecommunications industry efficiency: A comparative analysis of high and middle income countries." Telecommunications Policy. 44 (5), pp. 1-11. https://doi.org/10.1016/j.telpol.2020.101958
Article Title

Telecommunications industry efficiency: A comparative analysis of high and middle income countries

ERA Journal ID5090
Article CategoryArticle
AuthorsOredegbe, Abayomi (Author) and Zhang, Yahua (Author)
Journal TitleTelecommunications Policy
Journal Citation44 (5), pp. 1-11
Article Number101958
Number of Pages11
Year2020
Place of PublicationUnited Kingdom
ISSN0308-5961
1879-3258
Digital Object Identifier (DOI)https://doi.org/10.1016/j.telpol.2020.101958
Web Address (URL)https://www.sciencedirect.com/science/article/abs/pii/S0308596120300501
Abstract

This study evaluates telecommunications industry efficiency in 19 countries grouped into high income countries (HICs) and middle income countries (MICs). Using data from 2001 to 2013 and a two-stage Data Envelopment Analysis (DEA), it finds that HICs outperformed MICs, however, the two groups of countries exhibited improved technical efficiency, managerial effectiveness, and operational scale. Additionally, time in deregulation is negatively associated with technical and scale efficiency in HICs, however, the influence is insignificant in MICs. Labour productivity drives technical efficiency in HICs. Also, it augments managerial resourcefulness in HICs and MICs, however, its influence on scale efficiency is immaterial. Revenue per subscription enhances technical efficiency and managerial effectiveness in the two groups of countries. The relationship with scale efficiency, which is positive in HICs is irrelevant in MICs. Capital intensity has insignificant influence on managerial effectiveness in the two clusters of countries, however, it undermines technical efficiency in HICs and scale efficiency in MICs. Gross national income per capita is inconsequential to scale enhancement. However, it contributes to technical efficiency in the two categories of countries and drives managerial performance in HICs. Efficiency performances in HICs and MICs are insensitive to the industry's concentration level. Inflation has insignificant influence on scale efficiency in HICs and MICs. Although, it drives technical efficiency and managerial performance in MICs, the influence in HICs is immaterial. The joint impact of labour productivity and capital intensity is irrelevant to operational scale in HICs and MICs, however, it is negatively associated with technical efficiency and managerial effectiveness in MICs. This empirical study provides additional insight that managers in the industry and policy makers will find useful during strategy formulation and policy deliberations.

KeywordsDEA; Efficiency; Telecommunications; Tobit
ANZSRC Field of Research 2020380109. Industry economics and industrial organisation
Byline AffiliationsUniversity College of the North, Canada
School of Commerce
Institution of OriginUniversity of Southern Queensland
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