Does Regulation Drive Competition? Evidence from the Spanish Local TV Industry
Although we have many tools to understand the effect of regulation on competition, we know little about the importance of enforcement in explaining the impact of regulation. For this purpose, this paper uses data from Spanish local television industry in Spain from 1995 through 2001, which provide an unique opportunity for examining how competition changes with the introduction of regulation and a posterior liberalization. During this period, the television industry transitioned from a state of alegality (no regulation in place) to being highly regulated and finally to being deregulated. Using a firm entry model from Bresnahan and Reiss (1990, 1991), we estimate local TV station entry thresholds by number of entrants across years. We decompose the ratio into the fixed costs and variable profits, and find both an increase in the fixed-costs ratios and decrease in the variable-profit ratios drive the departure in the entry threshold from the one in other years. We find the model parameters are informative about the nature of the regulation and how strongly the government enforces the regulation.
References listed on IDEAS
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.:
- Griffith, Rachel & Harmgart, Heike, 2008. "Supermarkets and Planning Regulation," CEPR Discussion Papers 6713, C.E.P.R. Discussion Papers.
- Gil, Ricard & Riera-Crichton, Daniel, 2011. "Price discrimination and competition in two-sided markets: Evidence from the Spanish local TV industry," IESE Research Papers D/894, IESE Business School.
- Mitsukuni Nishida, 2008. "Estimating a Model of Strategic Store-Network Choice," Working Papers 08-27, NET Institute, revised Nov 2008.
- Junichi Suzuki, 2013.
"Land Use Regulation As A Barrier To Entry: Evidence From The Texas Lodging Industry,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(2), pages 495-523, May.
- Junichi Suzuki, 2010. "Land Use Regulation as a Barrier to Entry: Evidence from the Texas Lodging Industry," Working Papers tecipa-400, University of Toronto, Department of Economics.
- Junichi Suzuki, 2010. "Land Use Regulation as a Barrier to Entry: Evidence from the Texas Lodging Industry," Working Papers tecipa-412, University of Toronto, Department of Economics.
- Klein, Maury, 1990. "Competition and Regulation: The Railroad Model," Business History Review, Cambridge University Press, vol. 64(02), pages 311-325, June.
- Catherine Schaumans & Frank Verboven, 2008. "Entry and regulation: evidence from health care professions," RAND Journal of Economics, RAND Corporation, vol. 39(4), pages 949-972.Full references (including those not matched with items on IDEAS)
- Schaumans, Catherine & Verboven, Frank, 2006. "Entry and Regulation - Evidence from Health Care Professions," CEPR Discussion Papers 5482, C.E.P.R. Discussion Papers.
When requesting a correction, please mention this item's handle: RePEc:net:wpaper:1205. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nicholas Economides)
If references are entirely missing, you can add them using this form.