Lopsided effects of telecom reforms on mobile markets in the enlarged EU: Evidence from dynamic quantile model

The European Union (EU) has recently been significantly enlarged with addition of ten countries, almost all from Central and Eastern Europe (CEE). This was expected to enhance the performance of the mobile telecommunications industry in the accession countries and in turn to consolidate the highly fragmented European mobile telecoms market to finally reach the single market goal. However, the significant differences between mobile telecommunication performances from one country to another in the enlarged European area raise the issue of how optimal and durable the EU-level reforms have been. We use dynamic quantile regression methods to estimate the effects of mobile telecommunication reforms on the providers' performance in the EU enlargement context. This approach allows uncovering potential asymmetric effects of telecom reforms policy by letting the parameters of regressions vary across the conditional distribution of the sector's performance indicators. Using annual data from on 32 European countries from 1993 to 2011, we document asymmetrical responses to the reforms depending on the conditioning quantile at which they are calculated. Our results show that the effects of the generic and imposed European reforms are notably beneficial and larger for players in developed European countries characterized initially by real and higher degree of the reforms implementation. Accordingly, the success and durability of European reforms, especially in the new CEE member states, which often fail to comply with the pace of the reforms' adoption of industrialized European countries, is not guaranteed when countries specifications are not sufficiently taken into account. A final appealing result regarding the regress of the reform-performance relationship in the mobile markets after enlargement even for western countries attract attention on revising the Europe's current approach to telecoms regulation.     

Telecommunications reform and efficiency performance: Do good institutions matter?

Until recently, most studies investigating telecommunication reforms performance have failed to incorporate the importance of institutions into the empirical analysis. This study highlights the importance of institutional governance on telecommunications efficiency and provides empirical results for the impact of institutions on reform outcomes. It provides significant evidence that the institutional environment in which reform progress takes place is an important determinant for successful reform. This study uses the stochastic distance function approach to capture the role of institutions in explaining efficiency differences across 70 countries. The empirical analysis reveals that policy stability in the form of substantive checks and balances on executive power is the most important aspect for successful reform. Independently, legal integrity improves telecommunications efficiency through privatization, while greater freedom from corruption influences the effectiveness of a regulatory body.     

欧盟第三阶段天然气市场自由化改革及其对俄欧天然气合作的影响

欧盟推动天然气市场自由化改革,既是为了鼓励竞争、限制垄断以提高供气效率和供气安全性,在欧盟内部建立统一、开放的天然气市场,也是为了联合欧盟各国一致对俄,在与俄罗斯的能源博弈中提高议价能力,因此欧盟天然气市场自由化改革对俄欧天然气合作具有巨大影响。1）俄罗斯根据长期合同向欧洲供气的传统机制将受到冲击;2）俄管道气面临来自LNG的激烈竞争,迫使俄方改变天然气价与油价挂钩的传统定价机制;3）共同能源政策的制定和实施将提高欧盟对外议价能力,使俄在对欧天然气谈判中的议价能力相对削弱。欧盟第三阶段天然气市场自由化改革使俄罗斯面临巨大压力,但同时却为中国发展对俄天然气合作提供了战略机遇,中国应抓住这一难得的机遇,争取在与俄天然气合作中取得实质性的突破。     

Demand for dairy products in the EU

In the EU dairy sector, given the remaining high protective tariffs and the quota system, the main factor that drives dairy product market prices is the demand. This paper evaluates the development of demand in the EU and presents estimates of consumption trends and forecasts for the future as well as estimates of elasticity with respect to prices and income in two major EU consumer countries: France and Italy. We use two methods to estimate the development of demand for dairy products, one based on a multi-stage demand system and another based on a single trend equation. The two methods generally lead to the same qualitative results but trend projections are larger using the demand system approach which is based on a shorter data period. This difference is thus partly explained by the fact that high trend projections are not sustainable over a long period. The results show a decreasing consumption of butter and fluid milk and an overall growth in protein and fat consumption. Nevertheless, the increase in fat consumption should be more moderate than the consumption of protein. The results also show that the demand for dairy products is relatively price inelastic but is more sensitive to changes in income (especially for butter and cheese categories). As shown by the use of a partial equilibrium model of dairy markets, the likely impact of the CAP reform strongly depends on the development of demand for dairy products in the EU. More research effort on demand analysis is therefore crucial in order to assess the impact of reforms or trade negotiations more accurately and effectively.     

The political economy of the Korean telecommunications reform

South Korea proclaimed a gradual economic liberalization ever since the early 1980s. Regardless of her vow to do so, however, most of liberalization efforts turned out to be a sheer rhetoric. In sharp contrast, genuine market liberalization and regulatory reforms are being introduced in the telecommunication sector, which is unprecedented in the Korean economic history. Why and how could Korea pursue such a full scale market liberalization and regulatory reforms in the telecommunications sector? Though it is argued that a regulatory convergence in economic management is found in everywhere in the world, the particular speed, scope, and/or processes of a country’s telecommunication reform cannot be understood correctly without examining the structures and institutions of the Korean political economy and of the telecommunications industry. This paper examines the causes and consequences of the Korean telecommunication reform by analyzing the relevant institutional changes both in domestic and international, which largely affect the interaction among those involved in the process of market liberalization and regulatory reforms.     

On the asynchronous approvals of GM crops: Potential market impacts of a trade disruption of EU soy imports

Due to their high protein content, soybeans are important feedstuffs in the European Union (EU). However, the cultivation of soybeans using genetically modified (GM) varieties in non-EU countries is increasing and the EU authorization of GM products takes longer than in other countries, leading to an asynchronous approval between the EU and non-EU countries that might induce soybean trade disruptions. This paper uses an integrated modelling system to simulate Argentina, Brazil and the United States ending soybean exports to the EU. The impact on world trade and on the EU import prices of soy products is analysed with a computable general equilibrium model. EU soy imports are shown to decline, and the import price of soybeans in the EU increases. The effects on EU agricultural markets are analysed based on a partial equilibrium model. Feed costs in the EU are found to increase with poultry and pork the most affected: production and exports decline and imports increase. However, the effects of a trade ban are found to be less profound than in many other studies due to compensating substitution effects at various market levels: increasing imports from third countries, increasing domestic oilseed production and the use of other protein feeds.     

Regulatory factors influencing Internet access in Australia and China: a comparative analysis

Internet access is determined by a combination of a widely available telecommunication infrastructure and affordability of Internet services, which are closely related to government policies (IT Group. (1999). Like other countries, both Australia and China have considered the Internet a powerful tool for national development economically and socially. As Internet growth becomes more and more significant, it becomes important to address the extent to which the underlying communication policies influence current growth rates.This paper provides a comparative review of policy approaches to regulating the Internet in both China and Australia. This study aims to identify the regulatory factors affecting Internet access in terms of availability and affordability, especially those factors which encourage the creation of a policy and regulatory environment favourable to the development of Internet infrastructure and access.This paper examines the linkages between regulatory regimes, market environments and Internet access in both China and Australia. The preliminary result suggests that government policies governing the telecommunications service market and promoting information infrastructure have a significant impact on the affordability and availability of Internet access. The most significant factor is the level of competition permitted in the telecommunication sector. It has become clear that further regulatory initiatives such as deregulatory mechanisms and interconnection regimes are needed to establish a more competitive environment for Internet access in both countries, and more particularly in China.     

The impact of regulation on the retail prices in fixed-line telephony across the European Union

This paper estimates reduced-form models for incumbent prices in the fixed telecommunications industry using data for European Union (EU) countries from 1998 to 2002. The regulation of fixed-line telephony has a significant impact on prices for residential consumers. Liberalization of the telecommunications industry decreased retail prices by about 8.2%. The introduction of carrier pre-selection and number portability had a negative impact on price levels. The estimation results also suggest that a 1% decrease in termination charges on the incumbent network led on average to a 0.17% decrease in the cost of usage basket for residential consumers. Furthermore, in the pricing regressions for incumbent local and national calls at peak and off-peak times interconnection charges are significant only in the estimation of national peak prices. A 1% decrease in single transit interconnection charges on the incumbent network led to a 0.31% decrease in incumbent national prices at peak times, as calculated for the average prices in the EU in 2002.     

Managerial ownership and the role of privatization in transition economies: The case of China

Within transition economies, a popular tactic for revitalizing large and inefficient stateowned enterprises (SOEs) is to privatize them. Unfortunately, the empirical evidence related to this issue is equivocal. This study, therefore, explores more deeply what the relationship may be between privatization efforts of SOEs and their financial performance in transition economies. Specifically, we seek to better understand whether privatization reforms per se, or other corporate governance mechanisms that complement or substitute for this effort, are most effective. Using a panel sample of Chinese state-owned public firms over an eight year period from 1999 to 2006, we find that managerial ownership has a more significant impact on firm performance than privatization does. This finding suggests that internal incentives to managers may be more effective than external market mechanisms in economies transitioning from centralized planning to market control. Our results are robust using a wide variety of performance measures and different model specifications.     

Competition reform and household welfare: A microsimulation analysis of the telecommunication sector in Ethiopia

This paper presents a novel simulation method for estimating the likely welfare effects of policy reforms aimed at increasing competition in strategic economic sectors such as mobile phone services. The proposed method relies on a partial equilibrium simulation approach and estimates the welfare impacts on current consumers and the potential welfare effects among new consumers brought into the market by changes in prices due to competition. This approach is applied to the information and communication technology (ICT) sector in Ethiopia, one of the three countries in the world with a monopoly in the market for mobile phone services. Based on household budget survey data for 2015/16 and departing from a baseline reform scenario that dilutes the market share of the state-owned monopoly to 45 percent, the simulation model estimates a 25.3 percent reduction in the price of mobile services and an increase in 5.7 million new users of mobile services. The predicted drop in prices and increased users would generate a combined relative welfare gain of 1.18 percent (1.09 percent among current users and 0.09 percent among new users), that could be translated into a 0.31 percentage point decline in the national poverty rate and equivalent to lifting about 275,000 people out of poverty. Alternative reform scenarios that dilute the market share of the monopoly to 75 percent and to 30 percent are expected to reduce poverty rate in 0.13 and 0.52 percentage points, respectively. The method proposed in this study represents a useful tool for promoting competition reforms in developing countries, particularly in sectors known for excluding significant segments of the population because of high consumer prices.     

The involvement of utilities in the development of broadband infrastructure: A comparison of EU case studies

Energy companies and other utility providers have been often involved in the provision of telecommunications services. Nevertheless, their contribution to broadband development has varied significantly over time. In the late 1990s, both local and national utilities in the European Union (EU) engaged in the provision of broadband networks, but only few of them managed to establish themselves as major broadband providers. More recently, new projects involving national utilities have been announced in several EU countries, opening new scenarios for utilities’ contribution to Next Generation Access (NGA) development. This paper identifies and explores the factors affecting the entry and the success of utilities in the EU broadband market, through the comparison of four case studies from four EU countries (Germany, Italy, Sweden and the UK). The evolution of utility involvement in the EU broadband markets is assessed against the interaction of market, technology and policy factors, focusing on the impact of policy and regulatory measures. As a result, this paper provides fruitful insights into the relevance and effectiveness of public interventions in broadband markets. Across the four case studies, public support and public ownership emerged as the main drivers for the involvement of utilities in EU broadband markets, with regulatory measures and economies of scope exerting a limited and decreasing influence. However, the contribution of utilities has varied significantly across the cases studied, reflecting the different approaches taken at national and local level to support broadband development, in spite of the common regulatory framework.     

Saving two in a billion:: quantifying the trade effect of European food safety standards on African exports

A growing concern over health risks associated with food products has prompted close examination of sanitary and phytosanitary standards in industrialized countries. This paper quantifies the impact of a new harmonized aflatoxin standard set by the EU on food exports from Africa. We employ a gravity model to estimate the impact of changes in differing levels of protection based on the EU standard, in contrast to those suggested by international standards. The analysis is based on trade and regulatory survey data for 15 European countries and nine African countries between 1989 and 1998. Our results suggest that the implementation of the new aflatoxin standard in the EU will have a negative impact on African exports of cereals, dried fruits and nuts to Europe. The new EU standard, which would reduce health risk by approximately 1.4 deaths per billion a year, will decrease these African exports by 64% or US$ 670 million, in contrast to regulation set through an international standard.     

Competitive dynamics in Polish telecommunications, 1990–2000: growth,regulation, and privatization of an infrastructural multi-network

This paper analyzes the relationship between governmental regulatory policies and competitive dynamics amongst private operators and the national monopolist, TP SA, in three network segments of the Polish telecommunications sector. Special attention is paid to the evolution of organizational strategies in a regulatory environment characterized by constant strategic indecision and reorientations of national policy makers. The paper finds that regulatory/competition coevolution has taken diverse forms in the three network subsegments, with asymmetric duopoly operating in the local fixed network, hidden competition at work in the long-distance fixed network, and oligopolistic technology-driven competition characterizing the high-growth cellular network. The conclusion reached is that Polish telecommunications to date has been stuck in a broad stage of pre-competitive market maneuverings by domestic and international capital, in preparation for privatization of the national operator and for full liberalization as part of EU integration.     

The impact of the European Novel Food Regulation on trade and food innovation based on traditional plant foods from developing countries

The stringent food safety assessment for novel foods required by the European Union’s Novel Food Regulation (NFR) places a high burden of proof on those bringing traditional food products to the EU market not consumed in the EU prior 1997. The regulation has emerged as a non-tariff trade barrier for heritage foods from developing countries that are viewed as “exotic” from the EU perspective. We show how the regulation has discouraged investment in supply chains and market development, and how this negatively affects income generation and rural poverty alleviation in developing countries. Focusing on plant-derived foods, this paper proposes to recognize traditional exotic foods in current EU law as a food category sui generis with food safety evidence requirements being proportionate to the risks they may pose. We argue that development activities promoting export food chains must increasingly accommodate legitimate food safety concerns about neglected food species in project design and seek to generate data to enhance regulatory acceptance in target markets.     

Universal service and disabled people

The EU regulatory framework enacted 25 May 2011 has the objective to provide functionally equal access to telecommunication services for disabled persons. What are the rules, who are the target groups, and what obstacles do they face when using various telecommunication services? And what arrangements do exist in a selected group of six EU Member States to remove these obstacles? Recommendations include the introduction of a more market-oriented approach, independent of specific networks.     

Which Are The Main Drivers Behind Residential Electricity Prices?

Over the last decade the residential electricity price in most EU Member States has been increasing. Even after the introduction of significant reforms such as the liberalisation of the electricity market. This upward trend is in response to the development of different price components along the electricity supply chain. In order to identify and analyse these components for EU-Member States, a more detailed price apportionment than those offered by public sources like Eurostat and IEA is necessary. The methodology proposed in this study analyses the development of the residential electricity price and its main components between 2002 and 2012 for Germany, France, Italy and the United Kingdom. The main drivers of the price trends observed for these four countries are subsequently identified, quantified and compared. Furthermore, the residential expenditure on electricity in each country is examined in connection with the evolution of residential electricity consumption. The results show how and to what extent the residential electricity price for the selected EU Member States depends on price components such as the electricity wholesale price, the gross margin, network expenditures, energy taxes and other levies related to the decarbonisation of the national energy system. Furthermore, this detailed analysis of residential electricity prices throughout the last decade provides a sufficient data basis to draw some prospective conclusions in terms of a short-term price outlook.     

Privatization of agricultural extension services in the EU: Towards a lack of adequate knowledge for small-scale farms?

Small-scale farming involves millions of households in the EU and plays an important role in the rural economy. A significant percentage of these farms produce commodities for the market. This productive dimension is often overlooked, however, as is the technical support needed by these farms. The privatization of national farm advisory systems (NFAS) has an impact on small-scale farming that should be better assessed. This paper, which looks at the characteristics of intangible services, helps demonstrate how the privatization of advisory services may have unexpected adverse effects on small farms. The dismantling of coordinating authorities has made these farms less visible as a target client. Less direct interaction with advisors makes it more difficult to co-produce knowledge that is relevant to their needs. In addition, back office activities such as scientific monitoring, building and updating databases and scientific experiments have been restructured in a way which does not support their interests.     

The endless need for regulation in telecommunication: An explanation

Telecommunication services have existed as a legal monopoly nearly throughout its entire history. In 1998, telecom market liberalisation was achieved across the European Union (EU) through the introduction of competition among telephone services. Asymmetrical obligations were deemed necessary in order to compensate the market power of the former monopolist.As the evolution of asymmetrical regulation in Spain illustrates, obligations and the telecommunications operators subject to them increased with the regulatory framework established in 2002 in the EU. This new regulatory framework may continue to expand through the inclusion of functional separation as another possible asymmetrical obligation. In short, it seems that the regulatory pressure on the telecommunications industry is increasing, despite the lapse in time since the liberalisation of the industry.In this paper, a methodology developed by the Austrian School of Economics is applied in order to explain why the telecommunication market is subject to increasing regulation in Europe, rather than deregulation, after more than 10 years of liberalisation. In particular, Mises's theory of price control is used to explain the evolution of the regulation of local loop unbundling.     

Fueling investments - The effect of the Agreement on Basic Telecommunications

As international agreements come under fire from current politics, it becomes ever more important to investigate the effect of such agreements. The telecommunication sector is of special interest due to its growing importance in the digital age. International law came into play in 1998 when the Agreement on Basic Telecommunications (BTA) entered into force. It demanded far-reaching liberalization reforms and was signed and ratified by 66 countries. A difference-in-differences estimator is used to analyze if the treaty had an impact on investments in telecommunications. The analysis reveals that investments in telecommunications became significantly higher in signatory countries than in non-signatory countries after the treaty took effect.     

‘Double marginalization’ problems: evidence from the Korean fixed-to-mobile service market

In this paper, examination of the possibility of a ‘double marginalization’ problem existing in the Korean telecommunication industry is conducted and suggestions are made for the provision of a new scheme to eliminate this possibility by changing the pricing system for fixed-to-mobile calls. Based on five key economic characteristics in the Korean mobile market, a simple model for double marginalization in the telecommunication market is introduced. Evidence was found to suggest that a double marginalization problem is likely to exist within Korea's telecommunication industry as it is presently structured, and that this problem is further likely to have an adverse effect on the industry by inflating the price of fixed-to-mobile calls. Two alternatives are proposed to effectively remedy this double marginalization issue. It is also shown that prices of fixed-to-mobile calls could be lowered by changing the caller pays principle into a receiver pays principle.