Toward a Wider Analysis of Market Definition: Theory and Evidence from the Turkish Telecommunications Industry

Tamer Çetin

Journal of Economic Issues, 2017, vol. 51, issue 4, 1137-1157

Abstract: This article develops a novel approach to the analysis of market definition. The article empirically investigates the main components of market definition, such as market power, substitution, and the simultaneous interaction between the demand and its determinants for the fixed and mobile voice services. To this end, I employ the multivariate Johansen cointegration methodology and analyze the Turkish voice telecommunications industry. While the VECM analysis confirms the presence of a simultaneous long-term causality relationship among the variables, the Johansen normalization results reveal demand elasticities that enable the analysis of market power and fixed-to-mobile substitution. My findings suggest that the fixed and mobile voice services, which are traditionally viewed as separate markets, can be defined as products that compete in the single market.

Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:mes:jeciss:v:51:y:2017:i:4:p:1137-1157

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DOI: 10.1080/00213624.2017.1391597

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