Essays on technological changes, telecommunications deregulation and its impact on telecom stock returns

This thesis focuses on the past fifty years' technological changes and some of the impacts they have on the modern economy. Among the impacts analyzed in this thesis are the following: dramatic improvements in performance of many products and the difficulties encompassing these changes in the official price indexes; drastic reduction in equipment costs and the endless possibilities for industry deregulation and market structural change; and the influence of regulatory events on industry stock returns and investor behavior.;Translog Restricted Variable Cost Function (RVCF) is used to model industry cost structures for the Scientific and Engineering Instrument Industry and the Telecommunications Industry. In Chapter One, unmeasured semiconductor input quality changes are identified and adjustment is made to the Instrument Industry cost function model to correct the otherwise overestimated productivity growth and scale economies. In Chapter Two, substantial economies of scale are identified in the telecommunications industry. That is one of the reasons there are such waves of mergers and acquisition going on at a time competition was expected to replace regulations in this formerly regulated monopoly market. Chapter Three looks at the impact of deregulation on telecommunications equity risk. Johnson's System of distribution and Bootstrapping method are used. The results show that Telecommunications equity risk increased following the 1996 Telecommunications Act and the subsequent regulatory events.;The analyses in this thesis offers some policy implications regarding technology and R&D policies, and some policy guidelines regarding the formerly regulated industries, although the main contribution is descriptive.