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Entry, standards and competition : firm strategies and the diffusion of mobile telephony

Koski, Heli and Kretschmer, Tobias (2005) Entry, standards and competition : firm strategies and the diffusion of mobile telephony. Review of Industrial Organization, 26 (1). pp. 89-113. ISSN 1573-7160

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Identification Number: 10.1007/s11151-004-4085-0


This paper studies the effects of a country’s regulatory setting and competitive environment on the performance of second-generation (2G) mobile telecommunication. We consider three dimensions of sector performance: entry time, service prices and diffusion. We address the question of non-random selection arising from cross-country differences in the timing of the commercialization of new technologies. Our empirical exploration shows that this type of sample selection may indeed be a substantial problem in cross-country studies on technology diffusion and yield biased estimates of the policy variables of interest. Our estimation results suggest that standardization accelerates 2G entry and diffusion, although within-standards competition triggers less aggressive price competition than between-standards competition. We also find that an early monopolist will price more aggressively to build up an installed base. Furthermore, we find that liberalizing markets for incumbent technologies (i.e. fixed line telephony) has accelerated the commercialization of 2G.

Item Type: Article
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Additional Information: Published 2005 © Springer. The original publication is available at LSE has developed LSE Research Online so that users may access research output of the School. Copyright and Moral Rights for the papers on this site are retained by the individual authors and/or other copyright owners. Users may download and/or print one copy of any article(s) in LSE Research Online to facilitate their private study or for non-commercial research. You may not engage in further distribution of the material or use it for any profit-making activities or any commercial gain. You may freely distribute the URL (<>) of the LSE Research Online website.
Subjects: H Social Sciences > HE Transportation and Communications
Sets: Research centres and groups > Managerial Economics and Strategy Group
Date Deposited: 06 Jun 2006
Last Modified: 18 Jun 2017 10:47

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