Regulation and investment in network industries: Evidence from European telecoms

Arbeitspapier

We provide evidence of an inherent trade-off between access regulation and investment incentives in telecommunications by using a comprehensive data set covering 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 negatively affect 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 incumbents' investments encourage provision of regulated access.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SFB 649 Discussion Paper ; No. 2009,039

Classification and Topics

• Classification: Wirtschaft ; Model Construction and Estimation ; Regulation and Industrial Policy: Other ; Telecommunications
• Subject: Telecommunications ; access regulation ; unbundling ; investment ; Telekommunikation ; Netzzugang ; Unternehmensentflechtung ; Investition ; Ökonomischer Anreiz ; Telekommunikationsinfrastruktur ; Telekommunikationspolitik ; Welt

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Grajek, Michał ; Röller, Lars-Hendrik
• Event: Veröffentlichung
• (who): Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk
• (where): Berlin
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/39322
• Last update: 10.03.2025, 11:44 AM CET