Competition and Employment in the Telecommunications Industry in Tanzania

This dissertation examines the impact of competition on employment in the 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 repressors. The findings based on OLS estimates indicate that I percent increase in competition increases employment by 1.02 percent 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 percent increase in competition increase employment by 0.66 percent; these results are highly significant at 5 percent. Such results suggest that OLS estimates are in added biased. The dissertation concludes significant positive correlation between employment and competition hence recommends for more efforts to support employment creating competition.