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Competition and investment in telecommunications: Does competition have the same impact on investment by private and state-owned firms?

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  • Lestage, Romain
  • Flacher, David
  • Kim, Yeonbae
  • Kim, Jihwan
  • Kim, Yunhee

Abstract

The liberalization of telecommunications is largely based on the premise that increasing competition will encourage investment. The hypothesis that liberalization promotes investment has received the most empirical support in recent research. However, a key question that has been largely ignored in the literature is whether competition has the same impact on investment by private and state-owned firms. We conduct an empirical study of the infrastructure investment of 20 incumbent telecommunications operators in OECD countries between 1994 and 2008, and we conclude that greater competitive pressure fosters infrastructure investment by state-owned incumbents but reduces investment by private incumbents.

Suggested Citation

  • Lestage, Romain & Flacher, David & Kim, Yeonbae & Kim, Jihwan & Kim, Yunhee, 2013. "Competition and investment in telecommunications: Does competition have the same impact on investment by private and state-owned firms?," Information Economics and Policy, Elsevier, vol. 25(1), pages 41-50.
  • Handle: RePEc:eee:iepoli:v:25:y:2013:i:1:p:41-50
    DOI: 10.1016/j.infoecopol.2013.02.001
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Georges Vivien Houngbonon & François Jeanjean, 2016. "What Level of Competition Intensity Maximises Investment in the Wireless Industry? ," Post-Print hal-01653797, HAL.
    2. Baek, Chulwoo & Jung, Euy-Young & Lee, Jeong-Dong, 2014. "Effects of regulation and economic environment on the electricity industry׳s competitiveness: A study based on OECD countries," Energy Policy, Elsevier, vol. 72(C), pages 120-128.
    3. repec:kap:jincot:v:18:y:2018:i:2:d:10.1007_s10842-017-0261-4 is not listed on IDEAS
    4. Agiakloglou, Christos & Polemis, Michael, 2015. "What determines demand for Telecommunications services? Evidence from the EU countries before and after liberalization," 26th European Regional ITS Conference, Madrid 2015 127119, International Telecommunications Society (ITS).
    5. Houpis, George & Rodriguez, Jose Maria & Ovington, Thomas & Serdarevic, Goran, 2015. "The impact of network competition in the mobile industry," 26th European Regional ITS Conference, Madrid 2015 127147, International Telecommunications Society (ITS).
    6. Roy, Martin, 2017. "The contribution of services trade policies to connectivity in the context of aid for trade," WTO Staff Working Papers ERSD-2017-12, World Trade Organization (WTO), Economic Research and Statistics Division.

    More about this item

    Keywords

    Competition; Investment; Ownership; Telecommunications;

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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