Group and individual heterogeneity in a stochastic frontier model: Container terminal operators
AbstractContainer ports are a major component of international trade and the global supply chain. Hence, the improvement of port efficiency can have a significant impact on the wider maritime economy. This paper deconstructs a representation in the existing literature that neglects the heterogeneity of individual and group-specific terminal operators. In its place, we present a hierarchical model to make a connection between efficiency and terminal operator group characteristics. The paper develops a stochastic frontier model that controls not only individual heterogeneity but also group-specific variations. The model decomposes the total stochastic derivation from the frontier into inefficiency, individual heterogeneity, group-specific variations, and noise components, with the estimation being performed using Markov chain Monte Carlo simulations. The validity of the model is tested with a panel of container terminal operator data from 1997-2004. Our findings show that terminal operator groups are important in promoting terminal efficiency at the global level, and that the operators with stevedore backgrounds show a higher efficiency than carriers.
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Bibliographic InfoArticle provided by Elsevier in its journal European Journal of Operational Research.
Volume (Year): 213 (2011)
Issue (Month): 3 (September)
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Stochastic processes Stochastic production frontier Markov processes Container terminal operators Port globalisation Group-specific;
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