The Telecommunications Industry and Economic Growth: How the Market Structure Matters
This paper presents an endogenous growth model where, in line with the recent empirical evidence, the telecommunications industry (telecom) is an engine of growth. In such a framework, this paper analyzes the channels through which telecom contributes to economic growth and focuses on market structure analysis for telecom, in the light of the recent changes in it. This paper suggests how the market structure of telecom and the competition type in the telecom market can matter for its contribution to economic growth. It also proposes the optimal market structure for telecom from the social welfare perspective. In addition, it suggests the direction of telecom policies which can improve social welfare, and uses its theoretical results for qualitative evaluation of the Telecommunications Act of 1996 and similar policies.