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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/29515
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| Title: | The Effects of International Simple Resale on Prices in International
Telecommunications Markets |
| Authors: | Pearcy, Jason - Tulane University
Savage, Scott J. - University of Colorado at Boulder |
| Keywords: | barriers to entry, competition, international message telephone prices,
international simple resale, prices |
| Issue Date: | 2009 |
| Series/Report no.: | Net Institute Working Paper;09-19 |
| Abstract: | This paper empirically investigates the effect of international simple
resale (ISR) authorization on the prices for international message
telephone service (IMTS). We compile a firm-level panel data set for
over 200 United States-foreign country bilateral markets from 1995 to
2004. These data provide detailed information on prices, variable costs,
fixed costs and market shares for 75 firms for each bilateral market, as
well as the timing of ISR authorization by the Federal Communications
Commission for each bilateral market. Estimates from a
difference-in-differences model show that ISR authorization, and the
associated lowering of barriers to entry, almost always results in lower
prices for all markets. Additionally, we find evidence that ISR
authorization alters the relationship between market concentration and
price. Prior to ISR authorization more concentrated markets have higher
prices. ISR authorization dampens this effect and in some cases reverses
the relationship so that market concentration is negatively correlated
with IMTS prices set by incumbent firms. |
| URI: | http://hdl.handle.net/2451/29515 |
| Appears in Collections: | NET Institute Working Papers Series
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