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China's Practice of Implementing a 3G Mobile Telecommunications Standard: A Transaction Costs Perspective

China's Practice of Implementing a 3G Mobile Telecommunications Standard: A Transaction Costs Perspective
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Author(s): Mingzhi Li (Tsinghua University, China) and Kai Reimers (RWTH Aachen University, Germany)
Copyright: 2009
Pages: 12
Source title: Information Communication Technology Standardization for E-Business Sectors: Integrating Supply and Demand Factors
Source Author(s)/Editor(s): Kai Jakobs (Aachen University, Germany)
DOI: 10.4018/978-1-60566-320-3.ch010

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Abstract

This chapter analyses and evaluates the Chinese government’s 3G policy of supporting the creation and implementation of the country’s indigenous TD-SCDMA standard. On the supply side, the addition of a new standard has enriched choices available on the 3G mobile telecommunications market; however, on the demand side, the government had to force operators to adopt this standard due to their lack of interest in the new standard. Building on insights gained from North’s theory on the transaction costs of politics, the authors explain this standardization process as a result of interaction between the political market and the economic market which has ultimately been driven by ideology shifts that took place on multiple levels of China’s society in recent years. They contribute to the standardization literature by demonstrating how North’s theory can be used for integrating political and economic aspects in the analysis of standardization processes.

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