Monopoly unveiled: Telecom breakups in the US and Mexico

Fausto Hernández Trillo (), Carlos Vladimir Ródriguez-Caballero () and Daniel Ventosa-Santaulària
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Fausto Hernández Trillo: CIDE División de Economía
Carlos Vladimir Ródriguez-Caballero: ITAM
Authors registered in the RePEc Author Service: Carlos Vladimir Rodriguez Caballero

Economics Bulletin, 2025, vol. 45, issue 4, 1989 - 1995

Abstract: This paper examines the decline in market capitalization after a monopoly breakup to assess how financial markets value market power in the telecom sectors of the US (AT&T) and Mexico (AMX). Using univariate structural time series models, we estimate the firm's value without the breakup and compare it to post-divestiture values, revealing a 65% drop for AT&T and 32% for AMX. These findings highlight the sizeable impact of monopoly breakups on market capitalization.

Keywords: Monopoly breakup; market power; firm value; AT&T; AMX (search for similar items in EconPapers)
JEL-codes: G1 L1 (search for similar items in EconPapers)
Date: 2025-12-30
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Related works:
Working Paper: Monopoly Unveiled: Telecom Breakups in the US and Mexico (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-24-00542

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