Telcos

Assessing Barriers To Trade In The Distribution And Telecom Sectors In Emerging Countries

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Executive Summary

The authors compute Ad Valorem Equivalents (AVEs) for the regulation in three service sectors (i.e. fixed telecom, mobile telecom, distribution) applied by selected emerging countries. They start with qualitative information on the restrictions applied by each country in each sector on the basis of which they apply a multivariate statistical approach, to transform this qualitative data into a Trade Restrictiveness Synthetic Index (STRI). In a second stage, they estimate the average impact of STRI on price cost margins, using a method avoiding the usual two-stage estimation. In the third stage, this impact is used to calculate the AVE of the STRI estimated in the first step.

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