The impact of infrastructure duplication on investment in network industries

Gordon J. Klein, Phil-Adrian Klotz and Johannes Paha

No 2601, Bremen Papers on Economics & Innovation from University of Bremen, Faculty of Business Studies and Economics

Abstract: This study provides an empirical assessment of whether competition stimulates infrastructure investment within network industries – an issue that remains unresolved through theoretical approaches alone. We examine this question in the context of fiber-optic broadband deployment by internet service providers in Germany, a sector that has drawn regulatory scrutiny amid concerns that incumbent firms engage in strategic duplication of infrastructure to deter market entry. To this end, we construct a novel dataset by applying text mining techniques to systematically extract information on fiber infrastructure duplication from newspaper reports. Employing econometric methods, we estimate the causal impact of competition on investment behavior. Contrary to the expectation that competition may spur infrastructure expansion, our findings indicate that competitive pressure is associated with a deceleration in fiber network rollout.

Keywords: Fiber Rollout; Infrastructure Competition; Telecommunication (search for similar items in EconPapers)
JEL-codes: D22 L52 L86 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2026-03
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Persistent link: https://EconPapers.repec.org/RePEc:atv:wpaper:2601

DOI: 10.26092/elib/5858

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