Competition and production efficiency: Telecommunications in OECD countries

Abstract This paper applies nonparametric methods to examine the production efficiency of telecommunications in 24 OECD countries. Three alternative DEA (data Envelopment Analysis) measures are adopted. Using the country data from 1980 to 1995, we found that, although the list of countries allowing for telecommunications competition varies over time, on average these countries are always more efficient by any of the three measures. Similar conclusions were derived from the company data during the 1992–1995 period. We concluded that competition in telecommunications tends to be associated with enhanced production efficiency.

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