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Econometric Cost Structure Estimates for Cellular Telephony in the United States

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  • McKenzie, David J
  • Small, John P

Abstract

This article estimates economies of scale for a sample of five cellular telephony firms in the United States. We reject constant returns to scale for all but the smallest firm studied; the remaining firms exhibit decreasing returns to scale. This finding suggests that scale economies cannot be used to justify the current regulated duopoly structure of United States cellular markets. Copyright 1997 by Kluwer Academic Publishers

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Bibliographic Info

Article provided by Springer in its journal Journal of Regulatory Economics.

Volume (Year): 12 (1997)
Issue (Month): 2 (September)
Pages: 147-57

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Handle: RePEc:kap:regeco:v:12:y:1997:i:2:p:147-57

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Web page: http://www.springerlink.com/link.asp?id=100298

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Cited by:
  1. Russell Pittman, 2012. "The Proposed Merger of AT&T and T-Mobile: Are There Unexhausted Scale Economies in U.S. Mobile Telephony?," EAG Discussions Papers 201202, Department of Justice, Antitrust Division.
  2. Vogelsang, Ingo, 2010. "The relationship between mobile and fixed-line communications: A survey," Information Economics and Policy, Elsevier, vol. 22(1), pages 4-17, March.
  3. Bloch, Harry, et al, 2001. "The Cost Structure of Australian Telecommunications," The Economic Record, The Economic Society of Australia, vol. 77(239), pages 338-50, December.
  4. Piacenza, Massimiliano & Vannoni, Davide, 2004. "Choosing among alternative cost function specifications: an application to Italian multi-utilities," Economics Letters, Elsevier, vol. 82(3), pages 415-422, March.
  5. Gagnepain, Philippe & Pereira, Pedro, 2007. "Entry, costs reduction, and competition in the Portuguese mobile telephony industry," International Journal of Industrial Organization, Elsevier, vol. 25(3), pages 461-481, June.
  6. Ottoz Elisabetta & Di Giacomo Marina, 2008. "Diversification strategies and scope economies: Evidence from a sample of Italian regional bus transport Pproviders," Department of Economics and Statistics Cognetti de Martiis. Working Papers 200802, University of Turin.
  7. Victor Glass & Stela Stefanova, 2012. "Economies of scale for broadband in rural United States," Journal of Regulatory Economics, Springer, vol. 41(1), pages 100-119, February.
  8. Takanori Ida & Toshifumi Kuroda, 2009. "Discrete choice model analysis of mobile telephone service demand in Japan," Empirical Economics, Springer, vol. 36(1), pages 65-80, February.
  9. Gary Madden & Harry Bloch & Grant Coble-Neal, 2002. "Labour and capital saving technical change in telecommunications," Applied Economics, Taylor & Francis Journals, vol. 34(14), pages 1821-1828.
  10. Michael Crew & Paul Kleindorfer, 2012. "Regulatory economics and the journal of regulatory economics: a 30-year retrospective," Journal of Regulatory Economics, Springer, vol. 41(1), pages 1-18, February.
  11. Gasmi, Farid & Ivaldi, Marc & Recuero Virto, Laura, 2008. "An Empirical Analysis of Cellular Demand in South Africa," IDEI Working Papers 531, Institut d'Économie Industrielle (IDEI), Toulouse.
  12. Nemoto, Jiro & Asai, Sumiko, 2002. "Scale economies, technical change and productivity growth in Japanese local telecommunications services," Japan and the World Economy, Elsevier, vol. 14(3), pages 305-320, August.
  13. Gruber, Harald, 2001. "Competition and innovation: The diffusion of mobile telecommunications in Central and Eastern Europe," Information Economics and Policy, Elsevier, vol. 13(1), pages 19-34, March.
  14. Joshua S. Gans & Stephen P. King & Julian Wright, 2005. "Wireless Communications," Development Research Unit Working Paper Series archive-45, Monash University, Department of Economics.

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