The Breakup of the Bell System and its Impact on US Innovation

Watzinger, Martin und Schnitzer, Monika (10. Oktober 2022): The Breakup of the Bell System and its Impact on US Innovation. Collaborative Research Center Transregio 190, Discussion Paper No. 341

Abstract

We analyze the effects of the 1984 breakup of the Bell System on the rate, diversity, and direction of US innovation. In the antitrust case leading to the breakup, AT&T, the holding company of the Bell System, was accused of using exclusionary practices against competitors. The breakup was intended to end these practices. After the breakup, the scale and diversity of telecommunications innovation increased. Total patenting by US inventors related to telecommunications increased by 19%, driven by companies unrelated to the Bell System. Patenting by Bell's successor companies decreased, but not the number of top inventions.

• Dokumententyp: Paper
• Keywords: antitrust, innovation, diversity, exclusionary practices
• Fakultät: Volkswirtschaft > Collaborative Research Center Transregio "Rationality and Competition"
• Themengebiete: 300 Sozialwissenschaften > 330 Wirtschaft
• JEL Classification: O30, K21, L40
• Sprache: Englisch