The author would like to thank Susan Silbey and the participants of the Law & Society Conference, 2012 and MIT SASE Conference, 2012 for their helpful comments and suggestions. All errors remain the sole responsibility of the author.
Regulation and Governance Forum
Cross-national variations in industry regulation: A factor analytic approach with an application to telecommunications
Article first published online: 19 NOV 2013
© 2013 The Author. Regulation & Governance published by Wiley Publishing Asia Pty Ltd.
This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.
Regulation & Governance
Special Issue: Transnational Business Governance Interactions
Volume 8, Issue 1, pages 149–163, March 2014
How to Cite
Perkins, S. (2014), Cross-national variations in industry regulation: A factor analytic approach with an application to telecommunications. Regulation & Governance, 8: 149–163. doi: 10.1111/rego.12039
- Issue published online: 3 MAR 2014
- Article first published online: 19 NOV 2013
- Manuscript Accepted: 4 SEP 2013
- cross-national comparative analysis;
- factor analysis;
- industry regulation;
- principal component analysis (PCA);
- telecommunications sector
This study applies factor analytic techniques to 131 telecommunications regulatory agencies in 80 countries to develop a comparative framework for better understanding the cross-national institutional variation in industrial regulation. While some of these measures are specific to the telecom industry (i.e. World Trade Organization Basic Telecom Agreement participation), most of these regulatory variables can be applied to other regulated industries. After analyzing 30 variables, these techniques identify and quantify six distinct dimensions of industry regulation, namely, the competitive market structure rules, industry standards rules, entry barrier rules, institutional stability, political appointment process, and the regulatory governance structure. Despite the conventional wisdom that suggests the “rules of the game” are key to industry regulation, this study finds that the single largest source of cross-national variation is the level of regulatory institutional stability (accounting for 16 percent of the total variation in cross-national industry regulation). This suggests that more focus and attention should be given to the role formal institutions play in industry regulation. This study also finds differences in industry regulation between developed, developing, and least developed nations. Developed countries on average have significantly higher regulation, with the US being the highest. This suggests that regulation is a critical component of industrial regimes and the competitiveness of developed economies.