Cross-National Variations in Industry Regulation: A Factor Analytic Approach with an Application to Telecommunications
This study applies factor analytic
techniques to 131 telecommunications regulatory agencies in 80 countries to
develop a comparative framework for better understanding the cross-national
institutional variation in industrial regulation. While some of these measures
are specific to the telecom industry (i.e., WTO Basic Telecom Agreement
participation), most of these regulatory variables can be applied to other
regulated industries. After analyzing thirty variables, these techniques
identify and quantify six distinct dimensions of industry regulation, namely,
the competitive market structure rules, industry standards rules, entry barrier
rules, institutional stability, political appointment process and the
regulatory governance structure. Despite the conventional wisdom that suggests
the rules of the game are key to industry regulation, this study finds that the
single largest source of cross-national variation is the level of regulatory
institutional stability (accounting for 16% of the total variation in
cross-national industry regulation). This suggests that more focus and
attention should be given to the role formal institutions play in industry
regulation. This study also finds differences in industry regulation between
developed, developing, and least-developed nations. Developed countries on
average have significantly higher regulation with the U.S being the highest.
This suggests that regulation is a critical component of industrial regimes and
the competitiveness of developed economies.
Perkins, Susan E.. 2013. Cross-National Variations in Industry Regulation: A Factor Analytic Approach with an Application to Telecommunications. Regulation and Governance.
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