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What Drives Investment in Telecommunications Markets? Evidence from OECD Countries

Ulrich Heimeshoff, Heinrich Heine University Düsseldorf, 2013-05-06

Recent studies provide clear evidence that the quality of telecommunications infrastructure has strong impacts on economic growth. Especially in Germany there is a
controversial debate how to stimulate telecommunications investment to foster the
introduction of Next Generation Networks. To find appropriate policies to enhance
infrastructure investment one has to get a thorough understanding of the determinants
of infrastructure investment. Using a panel consisting of 30 OECD countries for the
period 1990 to 2011 and taking account of possible non-stationarities in aggregate
data, we investigate the main drivers of telecommunications investment on an aggregate level applying dynamic panel data methods. Our main finding is an inverted
U-shaped relationship between per capita telecommunications investment and competition.

volume:64, Issue 1
JEL:K23, L51, L96
keywords:competition next_generation_networks regulation telecommunications_investment

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