COMPETITION AND EMPLOYMENT IN THE TELECOMMUNICATIONS INDUSTRY IN TANZANIA
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Date
2011-09-22
Authors
Mtingele, Achilana Mkunga
Journal Title
Journal ISSN
Volume Title
Publisher
University of Dar es Salaam
Abstract
This dissertation examines the impact of competition on employment in the
telecommunications industry in Tanzania. Specifically, it addresses the question “Does
competition in telecommunications industry in Tanzania have any significant impact on
employment?” Furthermore, the competitive pressure existed in the industry after
liberalization in the 1990s is what induced the study. The panel data available for this
dissertation over the period of seventeen years, allows estimation of competition and
levels of employment that control for firm fixed effects. The model estimated relies on
employment equation that uses competition variable measured by Herfindhal-Hirschman
Index as one of the regressors. The findings based on OLS estimates indicate that 1 per
cent increase in competition increases employment by 1.02 per cent but the coefficient
estimate is not significant, partly suggesting biasness of OLS. When firm fixed effects
are controlled for, the model demonstrates robust positive correlation between
competition and employment; 1 per cent increase in competition increases employment
by 0.66 percent; these results are highly significant at 5 per cent. Such results suggest
that OLS estimates are indeed biased. The dissertation concludes significant positive
correlation between employment and competition hence recommends for more efforts to
support employment creating competition.