Regulatory Environment and Firms’ Performance in Eu Telecommunications Services
Abstract: In this study we empirically test the effects of regulated access prices and firms’ multinational status on firms’ performance by using firm, group, and country level information for the European broadband market over the period 2002-2010. Three measures of firms’ performance are used, namely; market share, turnover and productivity. Special attention is devoted to differences in the effects on performance measures depending on firms’ position as incumbent or entrant in the markets. We find that, while access prices exert a negative effect on entrants’ market share and turnover, the effect on incumbents’ turnover and productivity is positive. With regard to firms’ multinational status, we find that multinational entrants perform better than national entrants in terms of their market share but worst in terms of their turnover and productivity. The opposite happens with the incumbent multinationals; confirming that firms’ multinational status has a significant impact on performance, and that this impact is different for incumbents and entrants.
