Regulation and Investment in Network Industries: Evidence from European Telecoms
We provide evidence of an inherent trade-off between access regulation and investment incentives in telecommunications by using a comprehensive data set covering more than 70 fixed-line operators in 20 countries over 10 years. Our econometric model accommodates different investment incentives for incumbents and entrants, a strategic interaction of entrants’ and incumbents’ investments, and endogenous regulation. We find access regulation to have a negative effect on both total industry and individual carrier investment. Thus, promoting market entry by means of regulated access undermines incentives to invest in facilities-based competition. Moreover, we find evidence of a regulatory commitment problem: higher investments by incumbents encourage regulated access provision.
Year of publication: |
2012
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Authors: | Micha ; lstrok ; Grajek ; Röller, Lars-Hendrik |
Published in: |
Journal of Law and Economics. - University of Chicago Press. - Vol. 55.2012, 1, p. 189-189
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Publisher: |
University of Chicago Press |
Saved in:
Online Resource
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