Does privatisation matter? The long-term performance of British Telecom over 40 years

Massimo Florio

Fiscal Studies, 2003, vol. 24, issue 2, 197-234

Abstract: In this paper, we offer and discuss new evidence on the performance of British Telecom (BT) before and after privatisation. We use a unique data-set based on company accounts over 40 years (1960-99) and original additional company data on several variables. We focus particularly on output, prices, revenues, costs, employment, productivity, profits and investment. Our key findings are that operating profits (i.e. gross profits before interest and tax) were remarkably stable before and after divestiture, and that ownership change per se had little discernible impact on productivity trends, particularly between 1984 and 1991. Major changes in performance after 1991 were, however, related to variations in financial arrangements, competition and regulatory pressure. This allows us to regard the BT case history as a natural experiment on the relative importance of privatisation, liberalisation and regulation.

JEL-codes: L32 L33 L5 M54 (search for similar items in EconPapers)
Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:ifs:fistud:v:24:y:2003:i:2:p:197-234

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