What Drives Investment in Telecommunications? the Role of Regulation, Firms' Internationalization and Market Knowledge *
Year: 2012
Type: preprint
Abstract: The aim of this paper is to classify the firms operating in the European\ntelecommunications market according to their degree of internationalization and market\nknowledge, and to test the effects of this classification and the existence of access regulation\non infrastructure investment in European broadband markets. To do so, we construct a (unique)\ndata set for the 27 European countries for the period 2002 to 2009. We estimate, by means of\npanel data techniques (and instrumental variables to control for any potential endogeneity\nproblem), an investment equation for all firms and separate equations for entrant and\nincumbent firms. Our results show no significant relation between regulation and total\ninvestment. The variables capturing the degree of internationalization and market knowledge\nhave a positive and significant effect on total investment, being a positive and significant effect\non entrants� investment, but no significant impact on that of incumbent firms. This result\nindicates that, under the current regulatory framework, the firms that invest most are entrants\nwith international experience, while the expansion of incumbents into other countries does not\naffect their investments in their home countries
Authors: Daniel Montolio, Elisa Trujillo
Language: English
Topic: ICT Impact and Policies
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
Funder: Universitat de Barcelona
OpenAlex ID: W2168992912