Mobile and Fixed Substitution for Telephone Service in China
Telecommunications Policy, Volume 36, Issue 4, May 2012, Pages 301–310.
27 Pages Posted: 26 Apr 2011 Last revised: 9 Sep 2014
Date Written: April 25, 2011
We use a panel of province by year data for China from 1998-2007 to estimate own- and cross-price elasticities for fixed and mobile telephone service. Identification is achieved through the use of measures of the level of competition and privatization of the industry. Moreover, using neighboring province values ensures instrumental variable exogeneity. Our estimates suggest that these services have become fairly strong substitutes both for usage and for subscription. This provides evidence for the development of competition between these platforms.
Keywords: Telecommunications, Competition, China
JEL Classification: L96, L11, C33
Suggested Citation: Suggested Citation