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The impact of infrastructure duplication on investment in network industries

Author

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  • Klein, Gordon J.
  • Klotz, Phil-Adrian
  • Paha, Johannes

Abstract

This study provides an empirical assessment of whether competition stimulates infrastructure investment within network industries – an issue that remains unresolved through theoretical approaches alone. We examine this question in the context of fiber-optic broadband deployment by internet service providers in Germany, a sector that has drawn regulatory scrutiny amid concerns that incumbent firms engage in strategic duplication of infrastructure to deter market entry. To this end, we construct a novel dataset by applying text mining techniques to systematically extract information on fiber infrastructure duplication from newspaper reports. Employing econometric methods, we estimate the causal impact of competition on investment behavior. Contrary to the expectation that competition may spur infrastructure expansion, our findings indicate that competitive pressure is associated with a deceleration in fiber network rollout.

Suggested Citation

  • Klein, Gordon J. & Klotz, Phil-Adrian & Paha, Johannes, 2026. "The impact of infrastructure duplication on investment in network industries," Bremen Papers on Economics & Innovation 2601, University of Bremen, Faculty of Business Studies and Economics.
    • Handle: RePEc:atv:wpaper:2601
    DOI: https://doi.org/10.26092/elib/5858
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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