Total factor productivity measures for Hong Kong telephone

Since the early 1960s, the Hong Kong Telephone Company (HKTC)-the dominant firm in Hong Kong's local telephone market-has undergone several regulatory reforms. The company has been subject to price control, rate-of-return regulation and price-cap regulation. This paper estimates the total factor productivity (TFP) growth of HKTC. The empirical results show that the estimated TFP growth of HKTC was 2.31-3.56% per year between 1964 and 1998. TFP growth varied substantially under different regulatory regimes, and the importance of the scale effect relative to the technological effect diminished over time.