Mobile and Fixed Substitution for Telephone Service in China

Ward, Michael R.; Zheng, Shilin

doi:10.2139/ssrn.1822668

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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: 21 May 2012

See all articles by Michael R. Ward

Michael R. Ward

University of Texas at Arlington - College of Business Administration - Department of Economics; ZEW, Mannheim

Shilin Zheng

National School of Development Peking University

Date Written: April 25, 2011

Abstract

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

Ward, Michael Robert and Zheng, Shilin, Mobile and Fixed Substitution for Telephone Service in China (April 25, 2011). Telecommunications Policy, Volume 36, Issue 4, May 2012, Pages 301–310., Available at SSRN: https://ssrn.com/abstract=1822668 or http://dx.doi.org/10.2139/ssrn.1822668