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Efficiency of telecommunications companies in European countries

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Abstract

The telecommunications sector has undergone the most drastic changes in terms of market liberalization and has dominated the privatisation process in most countries in terms of the size of its assets and because this industry is the flagship of public services. The purpose of this study is to conduct a comparative analysis of the efficiency of eleven European privatised Public Telecommunications Operators PTOs from 1997 to 2005 and to determine whether privatisation, liberalisation and investment in infrastructure have increased their efficiency or not. We make use of the DEA methodology to analyse the efficiency of PTOs, as this model is especially appropriate to analyse organisations whose production process does not result in the obtaining of a product but in the delivery of a public service. In spite of the technological progress, our results do not show that the comparative performance of PTOs has grown significantly during the period analysed. Therefore, we must take into account other factors such as privatisation, state regulation and organisational changes to determine their performance. From our study, we can conclude that not all companies have been able to adapt equally to the competitive market. The non-efficient companies have traditionally operated in a protectionist market and they continue in a monopolistic situation in spite of market liberalization.

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Notes

  1. This assertion is coherent with the Public Choice Theory (Buchanan 1972).

  2. Cooper et al. (2000) and Seiford (1996) collected numerous references on empirical applications of the DEA technique in several areas such as education, teaching, banking and savings banks, transport, agriculture, industrial companies etc.

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Acknowledgments

This study has been carried out with the financial support of the Spanish National R&D Plan through research project ECO2010-17463.

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  1. Department of Accounting and Finance, Faculty of Economics and Business Administration, University of Zaragoza, Gran Vía, 2, 50005, Zaragoza, Spain

    Lourdes Torres & Patricia Bachiller

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  1. Lourdes Torres
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  2. Patricia Bachiller
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Correspondence to Patricia Bachiller.

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Torres, L., Bachiller, P. Efficiency of telecommunications companies in European countries. J Manag Gov 17, 863–886 (2013). https://doi.org/10.1007/s10997-011-9203-4

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