The European Satellite Industry: Prospects for Liberalization
AbstractThis paper evaluates the effects of liberalizing access to the space sector, as currently envisaged by the EC Commission. We undertake an econometric evaluation of the degree of scale economies in satellite operations and calibrate a Cournot model of competition in which the effect of liberalization is modelled as the segmentation of national markets that currently prevails. We conclude that existing players in the satellite operations industry would make negative profits under liberalization. We find that four players would break even and operate close to the minimum efficient scale (of about ten satellites). We also conclude that some consolidation is required in the production of satellites. In both cases it seems that intervention by a supra-national authority like the EC Commission would be useful.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 813.
Date of creation: Sep 1993
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- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
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- Zervos, Vasilis & Siegel, Donald S., 2008. "Technology, security, and policy implications of future transatlantic partnerships in space: Lessons from Galileo," Research Policy, Elsevier, vol. 37(9), pages 1630-1642, October.
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