Innovation, investment and regulation : What are the options for regulation in the near future ?
AbstractThis paper addresses the question of what options are available to regulate the sector in the near future. In order to answer this question, the paper focuses on the problem of investment and innovation in an ex ante regulated sector. Relying on existing literature, we argue that ex ante regulation could represent a danger for the long-term development of the sector by delaying or cancelling investment projects, especially (but not only) concerning the construction of new infrastructures. We also argue that ex ante regulation is distorting investment itself: incremental investment is privileged as opposed to radical investment. In this context, we identify three possible options for regulation in the near future: 1) continuing ex ante regulation, 2) substituting ex post regulation for ex ante regulation and 3) implementing an industrial policy for macro-strategic reasons. After describing a few major mutations in the sector that must be taken into account by regulators and presenting the major dilemmas that the latter are facing, we propose two possible solutions inspired by foreign policy. The first solution consists of offering investors regulation holidays, with regular reviews to deem whether these holidays should be prolonged or not. The second solution consists of implementing an industrial policy that could take the form of a contract negotiated between the regulator and operators. This would guarantee the absence of ex ante regulation if the conditions of the contract (in terms of regional planning, price, quality of service, types of investment…) are met.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/119.
Date of creation: Oct 2006
Date of revision:
Publication status: Published in Communications and Strategies, 2006, no. 64. pp. 105-123.Length: 18 pages
Industrial Policy; Investment; Innovation; Regulation;
Find related papers by JEL classification:
- G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
- O21 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
- O25 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paul Krugman, 1990.
"Increasing Returns and Economic Geography,"
NBER Working Papers
3275, National Bureau of Economic Research, Inc.
- Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 99(3), pages 483-99, June.
- Baake, Pio & Kamecke, Ulrich & Wey, Christian, 2005. "A Regulatory Framework for New and Emerging Markets," MPRA Paper 2518, University Library of Munich, Germany.
- Joshua S. Gans & Stephen P. King, 2004. "Access Holidays and the Timing of Infrastructure Investment," The Economic Record, The Economic Society of Australia, The Economic Society of Australia, vol. 80(248), pages 89-100, 03.
- Veronika Grimm & Gregor Zoettl, 2006. "Capacity Choice under Uncertainty: The Impact of Market Structure," Working Paper Series in Economics, University of Cologne, Department of Economics 23, University of Cologne, Department of Economics.
- Lars-Hendrik Röller & Leonard Waverman, 1996.
"Telecommunications Infrastructure and Economic Development: A Simultaneous Approach,"
CIG Working Papers, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG)
FS IV 96-16, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
- Lars-Hendrik Roller & Leonard Waverman, 2001. "Telecommunications Infrastructure and Economic Development: A Simultaneous Approach," American Economic Review, American Economic Association, American Economic Association, vol. 91(4), pages 909-923, September.
- Röller, Lars-Hendrik & Waverman, Leonard, 2000. "Telecommunications Infrastructure And Economic Development: A Simultaneous Approach," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2399, C.E.P.R. Discussion Papers.
- Calderini, Mario & Garrone, Paola, 2001. "Liberalisation, industry turmoil and the balance of R&D activities," Information Economics and Policy, Elsevier, Elsevier, vol. 13(2), pages 199-230, June.
- Foros, Oystein, 2004. "Strategic investments with spillovers, vertical integration and foreclosure in the broadband access market," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 22(1), pages 1-24, January.
- Freeman, Chris, 1995. "The 'National System of Innovation' in Historical Perspective," Cambridge Journal of Economics, Oxford University Press, Oxford University Press, vol. 19(1), pages 5-24, February.
- Bourreau, Marc & Dogan, Pinar, 2005.
"Unbundling the local loop,"
European Economic Review, Elsevier,
Elsevier, vol. 49(1), pages 173-199, January.
- Kotakorpi, Kaisa, 2006. "Access price regulation, investment and entry in telecommunications," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 24(5), pages 1013-1020, September.
- Noel Uri, 2003. "The Effect of Incentive Regulation in Telecommunications in the United States," Quality & Quantity: International Journal of Methodology, Springer, Springer, vol. 37(2), pages 169-191, May.
- Piatek, Stanislaw, 2008. "Investment and Regulation in Telecommunications," MPRA Paper 23995, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alexandre Faure).
If references are entirely missing, you can add them using this form.