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.

Show object

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ESMT Working Paper ; No. 09-004

Classification and Topics

• Classification: Management ; Model Construction and Estimation ; Regulation and Industrial Policy: Other ; Telecommunications
• Subject: telecommunications ; access regulation ; unbundling ; investment ; Telekommunikation ; Netzregulierung ; Entflechtung ; Investition ; Ökonomischer Anreiz ; Telekommunikationsnetz ; Telekommunikationspolitik ; Welt

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Grajek, Michał ; Röller, Lars-Hendrik
• Event: Veröffentlichung
• (who): European School of Management and Technology (ESMT)
• (where): Berlin
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/96539
• URN: urn:nbn:de:101:1-201106143606