Estimating network effects in China＇s mobile telecommunications

A model is proposed along with empirical investigation to prove the existence of network effects in China＇s mobile telecommunications market. Futhernore, network effects on China＇s mobile telecommunications are estimated with a dynamic model. The structural parameters are identified from regression coefficients and the results are analyzed and compared with another literature. Data and estimation issues are also discussed. Conclusions are drawn that network effects are significant in China＇s mobile telecommunications market, and that ignoring network effects leads to bad policy making.