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Yardstick regulation and the operators' productivity of railway industry in Japan

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  • Mizutani, Jun
  • Usami, Munekatsu

Abstract

In Japan, the yardstick regulation was implemented as an incentive only for large private railway companies, in 1997. This study examined the effects of yardstick regulation on productivity of private railway companies by comparing TFP (Total Factor Productivity) of a large private railway group with that of a small private railway group in Kansai metropolitan area. We interpreted a railway's service to conduct the stratified 3T activities; Track, Train and Transport and estimated TFP for individual and total 3T activities. Estimation results showed that both railway groups had increased their TFP of total 3T activities contributed by productivity improvements of track and train activities since 1997. On the other hand, we could not find obvious evidences to show that the yardstick regulation for large railway companies had generated productivity improvements compared with small railway companies to which the traditional rate of return regulation is applied.

Suggested Citation

  • Mizutani, Jun & Usami, Munekatsu, 2016. "Yardstick regulation and the operators' productivity of railway industry in Japan," Research in Transportation Economics, Elsevier, vol. 59(C), pages 86-93.
    • Handle: RePEc:eee:retrec:v:59:y:2016:i:c:p:86-93
    DOI: 10.1016/j.retrec.2016.09.001
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    References listed on IDEAS

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    1. Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
    2. Fumitoshi Mizutani & Hideo Kozumi & Noriaki Matsushima, 2009. "Does yardstick regulation really work? Empirical evidence from Japan’s rail industry," Journal of Regulatory Economics, Springer, vol. 36(3), pages 308-323, December.
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    Cited by:

    1. Le, Yiping & Oka, Minami & Kato, Hironori, 2022. "Efficiencies of the urban railway lines incorporating financial performance and in-vehicle congestion in the Tokyo Metropolitan Area," Transport Policy, Elsevier, vol. 116(C), pages 343-354.
    2. Fumitoshi Mizutani, 2019. "Going Places: Rail Transport in Japan," Discussion Papers 2019-03, Kobe University, Graduate School of Business Administration.
    3. Dijkstra, Peter T. & Haan, Marco A. & Mulder, Machiel, 2017. "Design of yardstick competition and consumer prices: Experimental evidence," Energy Economics, Elsevier, vol. 66(C), pages 261-271.

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    More about this item

    Keywords

    Yardstick regulation; Railway industry; TFP (Total Factor Productivity);
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation

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