Competition and mobile network investment in China’s telecommunications industry

Kang, Fei; Hauge, Janice A.; Lu, Tsung‐Hsueh

doi:10.1016/j.telpol.2012.02.003

Cited by 13 publications

(10 citation statements)

References 44 publications

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“…They complement the findings of Garrone and Zaccagnino (2015) by focusing specifically on investment in the wireless networks rather than combining investment in fixed and mobile networks. Furthermore, the results of this paper extend those of Kang et al (2012) by providing a causal estimate of the impact of competition on investment. It also investigates the long run effect of competition on investment.…”

Section: Discussionsupporting

confidence: 63%

“…As discussed in section 5.3, reverse causality may be explained by more efficient firms investing more and experiencing less competition. This may explain why Kang et al (2012), who do not correct for endogeneity, find a negative in the estimation in order to correct for autocorrelation. See Baum et al (2007) for a detailed explanation of the GMM estimator along with the statistical corrections and tests.…”

Section: Resultsmentioning

confidence: 99%

“…In particular, Garrone and Zaccagnino (2015) find no correlation between competition and investment in wireless networks. Kang et al (2012) highlight a positive relationship between market concentration and investment in China's wireless industry. Kim et al (2011) find a negative relationship between competition, defined as the entry of Mobile Virtual Network Operators (MVNO), and investment by Mobile Network Operators (MNO).…”

Section: Related Literaturementioning

confidence: 94%

“… See Schumpeter (1942) andArrow (1962).2 SeeGarrone and Zaccagnino (2015) who find no correlation between competition and investment in fixed and mobile networks, andKang et al (2012) who find a positive correlation between market concentration and investment in the Chinese wireless market.…”

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confidence: 99%

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What level of competition intensity maximises investment in the wireless industry?

Houngbonon

Jeanjean

2016

Telecommunications Policy

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International audienceThis paper investigates the relationship between competition and investment in the wireless industry from a dynamic perspective. Using firm level data and instrumental variable estimation strategy, it finds that the relationship is inverted-U shaped. The investment maximising intensity of competition is reached when operators' gross profits represent 37 or 40 per cent of their revenues, depending on whether capital expenditures are normalised by the number of subscribers. This finding means that investment increases with competition as long as operators' profits are above the thresholds of 37 or 40 per cent of their revenues. Under these thresholds, there is a tradeoff between competition and investment. The paper also finds a significant long run effect of competition on investment which amplifies the short run effect by a factor of 3–4

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Section: Discussionsupporting

confidence: 63%

Section: Resultsmentioning

confidence: 99%

Section: Related Literaturementioning

confidence: 94%

mentioning

confidence: 99%

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What level of competition intensity maximises investment in the wireless industry?

Houngbonon

Jeanjean

2016

Telecommunications Policy

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“…There is not much research literature at the industry level. Kang et al [9] found that a positive correlation exists between market concentration and network investment in China's mobile telecommunications industry by using regional panel data models during the 2003-2009 period, and the imbalanced market structure increased the total industry investment. Elixmann et al [10] investigated thirteen mobile telecommunication markets in developed countries without finding a clear relationship between market competition and network investment.…”

Section: Literature Reviewmentioning

confidence: 99%

Market Competition, Infrastructure Sharing, and Network Investment in China’s Mobile Telecommunications Industry

Wang

Sun

2022

Sustainability

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The relationship between market competition and network investment in the mobile telecommunications industry has always been one of the focuses for scholars and regulatory agencies. The conclusions of previous studies on this topic remain ambiguous. Infrastructure sharing has become a noticeable trend in the global mobile telecommunications industry, but its impact on operators’ investment and innovation behaviors is controversial. This paper uses fixed effects and dynamic panel data models to empirically examine the relationship among the market competition, infrastructure sharing, and network investment in China’s mobile telecommunications industry. The results show that market competition has a significant positive impact on the total industry network investment, but the interaction of market competition and infrastructure sharing has undermined network investment, which indicates that the competitive strategy of rational operators will shift from facility-based competition to service-based competition when both deep infrastructure sharing and fierce market competition appear at the same time, and this is likely to cause insufficient incentives for investment in advanced technology. This paper suggests that China’s regulators should improve the market structure, enhance market competitiveness continuously, and support infrastructure sharing, but at the same time they should exercise caution when conducting in-depth infrastructure sharing. In addition, they should accelerate the development of 5G vertical industry applications to expand the market space for industry development.

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Does air quality affect firms’ investment efficiency? Evidence from China

Jiang

Shen

et al. 2022

International Review of Economics & Finance

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Competition and mobile network investment in China’s telecommunications industry

Cited by 13 publications

References 44 publications

What level of competition intensity maximises investment in the wireless industry?

What level of competition intensity maximises investment in the wireless industry?

Market Competition, Infrastructure Sharing, and Network Investment in China’s Mobile Telecommunications Industry

Does air quality affect firms’ investment efficiency? Evidence from China

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