Telecommunications divestiture in the UK: a crossed line?

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Abstract
Using data drawn from the Post Office accounts prior to 1981 the question of joint production in the postal and telecommunications industry in the UK, prior to separation, is addressed. The methodology utilises the correspondence between cointegration and error correction mechanisms as a method of tracking the adjustment of costs to equilibrium levels. Significant cost complementarities between postal and telecommunications services are found raising doubts concerning the desirability of separation.