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The telecommunications industry and economic growth: How the market structure matters

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  • Jerbashian, Vahagn

Abstract

This paper presents an endogenous growth model where the telecommunications industry is the engine of growth. In such a framework, it analyzes how the market structure of the telecommunications industry can matter for its contribution to long-run growth. It shows that policies which increase the number of firms and/or toughen competition imply higher innovative effort in the telecommunications industry and strengthen its contribution. Modeling entry into the telecommunications industry, this paper also shows that the entry either stops after a number of firms have entered or continues permanently. In the long-run, it is socially optimal to have permanent entry. This can necessitate subsidies to entry into the telecommunications industry.

Suggested Citation

  • Jerbashian, Vahagn, 2015. "The telecommunications industry and economic growth: How the market structure matters," Economic Modelling, Elsevier, vol. 51(C), pages 515-523.
  • Handle: RePEc:eee:ecmode:v:51:y:2015:i:c:p:515-523
    DOI: 10.1016/j.econmod.2015.09.004
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    More about this item

    Keywords

    Telecommunications industry; Market structure; Economic growth;

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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