Who Thinks About the Competition? Managerial Ability and Strategic Entry in U.S. Local Telephone Markets

Innovation and Economic Growth, Competition Policy & Antitrust, Networks, the Internet, and Cloud Computing and Networks and Infrastructure

Article Snapshot


Avi Goldfarb and Mo Xiao


NET Institute Working Paper #08-21, 2008


This paper examines how manager and firm characteristics relate to entry decisions in U.S. local telephone markets.

Policy Relevance

Managers's skills have an extremely strong impact on firms' strategic survival.

Main Points

  • Older firms with older, more experienced managers have higher estimated levels of strategic ability.


  • Managers with degrees in economics or business, and managers with graduate degrees, also have higher estimated levels of strategic ability.


  • This paper finds no evidence that the quality of managers’  degrees, based on their universities, is related to ability.


  • The estimates of strategic ability are also correlated with survival: those firms with lower estimated levels of ability are more likely to exit the industry early.

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