Abstract
Abstract According to current opinion, competition in telecommunications stimulates innovation. However, there are reasons to believe that at least in some circumstances competition might lead to a decrease in product innovation. In this paper a cross-sectional statistical analysis is carried out on data for the OECD countries. A positive correlation is indeed found between competition and innovation. However, the level of economic development is an important mediating variable. The economies of emerging technologies in the local loop lead to the conclusion that especially in the mobile segment competition will stimulate innovation.
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