Dynamic oligopoly and regulation in developing countries
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This dissertation consists of three essays studying the dynamic and strategic interactions of oligopolistic firms in developing countries using dynamic structural models. We focus on industries which have positive social benefits for the communities in which they operate, namely radio and banking. We use the estimated models to simulate counterfactual policies aimed at improving access for individuals in underserved areas. The first essay studies the social impacts of the liberalization of the radio broadcasting sector in Ghana. I analyze how the regulator affects commercial stations' decisions to enter and the resulting effects of coverage spillovers in rural areas. I exploit random variation in radio coverage caused by coverage spilling through gaps in mountainous areas and use this to estimate the effects of coverage on malaria incidence and development. I then estimate a dynamic structural entry model for commercial stations. In counterfactual simulations, I find that the allowance of more powerful transmitters is particularly effective in delivering the social benefits of radio to new communities. The second essay (joint with Calixte Ahokossi) studies voter turnout and regulatory inefficiency in the radio broadcasting market in Benin. We find an inverted-U relationship between the number of radio stations and voter turnout. We estimate a dynamic structural model for radio stations, taking into account the regulatory inefficiency in the market. Counterfactual simulations suggest that either removing the regulatory inefficiency or introducing targeted entry subsidies can spur entry in areas without radio stations, which would increase voter turnout in these areas. The third essay (joint with Marc Rysman and Robert M. Townsend) studies the banking sector in Thailand. Here, we argue that the effect of financial crises on bank branch location choices provides an unexplored channel by which crises affect access to credit. We estimate a dynamic structural model of oligopolistic location choice, allowing for complementarity in payoffs for bank branches in nearby locations, as well as competitive effects between rival banks. Using this model, we can predict counterfactual expansions of the bank branch network under policies focused on opening rural bank branches, or in the absence of the 1997 financial crisis.