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The European Satellite Industry: Prospects for Liberalization

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  • Neven, Damien J
  • Röller, Lars-Hendrik
  • Waverman, Leonard

Abstract

This 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.

Suggested Citation

  • Neven, Damien J & Röller, Lars-Hendrik & Waverman, Leonard, 1993. "The European Satellite Industry: Prospects for Liberalization," CEPR Discussion Papers 813, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:813
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. 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.
    2. Vasilis Zervos, 2011. "Conflict in Space," Chapters,in: Handbook on the Economics of Conflict, chapter 9 Edward Elgar Publishing.

    More about this item

    Keywords

    Deregulation; Satellite Industry; Space;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L80 - Industrial Organization - - Industry Studies: Services - - - General

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