Facility- and service-based competition and investment in fixed broadband networks: Lessons from a decade of access regulations in the European Union member states
This paper employs firm-level panel data of 57 incumbent and entrant firms for 23 European countries in the decade from 2003 to 2012. We examine the impact of service- and facility-based competition on firm-level investment as well as the strategic effects underlying infrastructure investment decisions. At the same time we explicitly model the structural dynamics of broadband investment by means of a flexible accelerator model. The empirical specification employs dynamic panel estimation techniques which allows us to account for various sources of endogeneity. We find that facility-based competition exerts a positive and significant impact on both incumbents and entrants implying that incumbents' and entrants' investment decisions are strategic complements. Moreover, we find that intermodal competition in terms of fixed-mobile substitution exerts different effects at the firm level. Finally, we show that service-based competition appears to have no significant impact on the investment decision of incumbents and entrants. However, with respect to the later phase of market liberalization, service-based competition exerts a negative impact on entrants' investment. Our results thus also provide relevant policy guidance on the role of service-based competition in regulating emerging high-speed broadband infrastructure.
Year of publication: |
2015
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Authors: | Briglauer, Wolfgang ; Gugler, Klaus ; Haxhimusa, Adhurim |
Publisher: |
Mannheim : Zentrum für Europäische Wirtschaftsforschung (ZEW) |
Subject: | investment dynamics | regulation | service-based competition | facility-based competition | strategic effects |
Saved in:
freely available
Series: | ZEW Discussion Papers ; 15-048 |
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Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Working Paper |
Language: | English |
Other identifiers: | 832562270 [GVK] hdl:10419/112761 [Handle] RePEc:zbw:zewdip:15048 [RePEc] |
Classification: | L43 - Legal Monopolies and Regulation or Deregulation ; L52 - Industrial Policy; Sectoral Planning Methods ; L96 - Telecommunications |
Source: |
Persistent link: https://www.econbiz.de/10011301345