Impact of regulation on the financing of European telecommunications operators: a systematic risk analysis.

Summary The thesis analyzes the effects of regulation on the systematic risk of a panel of 17 large European telecommunications operators between 1997 and 2012. The regulation/risk relationship is studied from three perspectives: (i) via the modification of the firm's revenue distribution, (ii) the promotion of competitive intensity, and (iii) the operators' financial structure choices. A model of the impact of regulation on the firm's financial structure shows that the strategic increase in debt can increase or decrease systematic risk. Three risk estimation methodologies are used: OLS and Kalman filter without and with TGARCH effect. The three aspects of the risk/regulation relationship are then addressed via a panel data study (covering financial ratios, competitive intensity, regulatory intensity and regime) and then by assessing the risk response to announcements of changes in the European regulatory framework (event study).