Transition Progress And Productivity Growth- The Case Of Telecommunications In Ebrd Countries Of Operation

Telecommunications and information technologies have been rapidly developing over the last three decades. Besides the intensive technological development, changes in policy and regulation have also been seen as the driving forces of a better sector performance. This invoked a specific challenge for scholars, policy-makers and practitioners - to investigate whether the liberalization, deregulation and open telecommunications markets have led to growth in sectors efficiency and productivity. The task is particularly challenging when analyzing countries that are in the process of transition from command to market economies. In this study we examine the change in Total Factor Productivity (TFP) of telecommunications sector and its relation to transition indicator scores for 22 EBRD (European Bank for Reconstruction and Development) countries from 1998 to 2007. For productivity estimation we relied on DEA (Data Envelopment Analysis) Malmquist index. The results showed that countries that have achieved greater progress towards a market economy had also experienced a higher TFP growth.