Do Entry Conditions Vary Over Time? Entry and Competition in the Broadband Market: 1999-2003

Posted: 4 Nov 2009

See all articles by Mo Xiao

Mo Xiao

University of Arizona - Eller College of Management - Department of Economics

Peter F. Orazem

Iowa State University and IZA; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: 2006

Abstract

The researchers Bresnahan and Reiss (1987, 1990, and1991) proposed the use of a firm's entry threshold ratio as a means ofmeasuring variance in a firm's competitive conduct as competition increaseswithin the industry. Building on the aforementioned research, this studyutilizes the entry and exit thresholds among firms in the broadband servicesindustry to understand competitiveness within the industry. An explanation of the Bresnahan and Reiss framework is provided.Then,the broadband market and its variations are defined utilizing data from 1999 to2003.The data originate from the Survey of High Speed Internet Providers,as compiled every six months by the National Telecommunications and InformationAdministration. Zip code tabulation areas (ZCTAs) were used to measure market size.Theresults of the data analysis are discussed and are compared to the Bresnahanand Reiss framework.The outcomes of the data analyses indicate theexistence of only small entry thresholds.When a new firm enters a marketof between one and three firms, the competitive conduct is only minimallyaffected. (AKP)

Keywords: Broadband market, National Telecommunications & Information Administration (US), Market competition, Market entry, Established firms, Information & communication technologies, Market exit, Startup rates, Startups, Internet industry, Internet technologies, Internet

Suggested Citation

Xiao, Mo and Orazem, Peter Francis, Do Entry Conditions Vary Over Time? Entry and Competition in the Broadband Market: 1999-2003 (2006). Allied Social Science Associations 2006 Annual Meeting. AEA Conference Papers, Vol. , 43 pp 2006. Available at SSRN: https://ssrn.com/abstract=1497852

Mo Xiao (Contact Author)

University of Arizona - Eller College of Management - Department of Economics ( email )

McClelland Hall
P.O. Box 210108
Tucson, AZ 85721-0108
United States

Peter Francis Orazem

Iowa State University and IZA ( email )

260 Heady Hall
Ames, IA 50011
United States
515-294-8656/515-294-7740 (Phone)
515-294-0221 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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