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Institutions and Telecommunications Investment

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  • Jung, Juan

Abstract

Closing the digital divide and fostering the digital economy is considered one of the keys for the countries to increase productivity and economic growth. To achieve those objectives, investment in telecommunications networks is crucial. This paper develops a theoretical framework to explain the link between public institutions and telecommunications investment. This model is estimated for a sample of 13 European countries during the period 2007–2015. Results were clear in verifying a positive association between institutional quality and investment levels. These findings were robust to different specifications of the model, and to the control of potential endogeneity linked to the institutional variable. Novel findings also pointed out at institutional quality being more relevant for most disadvantaged countries, in terms of development and digital connectivity. Furthermore, we found evidence of Property Rights being the main cause of concern for telecom operators, followed by corruption, judicial independence, transparency, and in a lesser degree, by political favoritism and trust.

Suggested Citation

  • Jung, Juan, 2020. "Institutions and Telecommunications Investment," Information Economics and Policy, Elsevier, vol. 50(C).
    • Handle: RePEc:eee:iepoli:v:50:y:2020:i:c:s0167624519300770
    DOI: 10.1016/j.infoecopol.2020.100849
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    Cited by:

    1. Liang Wang & Qiming Sun, 2022. "Market Competition, Infrastructure Sharing, and Network Investment in China’s Mobile Telecommunications Industry," Sustainability, MDPI, vol. 14(6), pages 1-17, March.
    2. Katz, Raúl & Jung, Juan, 2023. "The impact of taxation in the telecommunications industry," Information Economics and Policy, Elsevier, vol. 62(C).
    3. Faheem Ur Rehman & József Popp & Ejaz Ahmad & Muhammad Asif Khan & Zoltán Lakner, 2021. "Asymmetric and Symmetric Link between Quality of Institutions and Sectorial Foreign Direct Investment Inflow in India: A Fresh Insight Using Simulated Dynamic ARDL Approach," Sustainability, MDPI, vol. 13(24), pages 1-18, December.
    4. Jung, Juan & Katz, Raúl, 2022. "Spectrum flexibility and mobile telecommunications development," Utilities Policy, Elsevier, vol. 75(C).

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    More about this item

    Keywords

    Investment; Institutions; Telecommunications;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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