The dynamic effects of competition on investment: the case of the European mobile communications industry

Konferenzbeitrag

We evaluate the impact of competition on investments in Europe's mobile communications market during the 2011-2021 period. There are stark and sustained differences in market outcomes between three- and four-player markets in Europe, and economic theory suggests these could be partly explained by the dynamic effects of competition on the ability and incentives to invest by market players. We find strong evidence that market concentration in Europe is below optimal levels that would maximise investments, especially in four-player markets. The dispersion of fixed costs and assets among a greater number of players can result in diseconomies of scale and a less efficient use of resources. We also find evidence that investment incentives to improve quality and innovate are lower in markets with lower concentration indices and profit margins.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: 31st European Conference of the International Telecommunications Society (ITS): "Reining in Digital Platforms? Challenging monopolies, promoting competition and developing regulatory regimes", Gothenburg, Sweden, 20th - 21st June 2022

Classification and Topics

• Classification: Wirtschaft ; Regulation and Business Law: General ; Market Structure, Firm Strategy, and Market Performance: General ; Antitrust Issues and Policies: General ; Telecommunications

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bahia, Kalvin ; Castells, Pau
• Event: Veröffentlichung
• (who): International Telecommunications Society (ITS)
• (where): Calgary
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/265614
• Last update: 10.03.2025, 11:42 AM CET