Concentration of the mobile telecommunications markets and countries' competitiveness.

This study examines how the level of concentration of a country's mobile telecommunications market affects its competitiveness. We created a unique database with information on 59 countries, which we used to perform several estimations including an instrumental variable approach to explain the degree of concentration in mobile phone markets. Our first and direct estimation shows that the higher the concentration in this industry, the lower the countries' competitiveness. In order to understand this positive correlation, we provide two additional estimations. First, using an instrumental variable, we find that the concentration in mobile telecommunications market explains the use of information and communications technology (ICT). Moreover, we also find that the use of ICT is positively correlated with countries' competitiveness. Thus, our results confirm that the mobile phone industry has positive spillover effects on countries' competitiveness and demonstrate the benefits of policies designed to reduce concentration and market power in the industry. • We measure the impact of the concentration in the mobile market on countries' competitiveness. • Our results indicate that a higher concentration in the mobile phone industry is related to a lower level of competitiveness. • A higher degree of concentration in the mobile phone markets causes, on average, a reduction of 0.45 points (it is a scale of 1 to 7) at the level of digitisation of the countries' economies. • We also find that on average, higher levels of digitization correlate positively with higher competitiveness. • Our results suggest that regulations that aim to promote competition in mobile phone markets may generate positive externalities on other sectors of the economy. [ABSTRACT FROM AUTHOR]