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On the efficiency of toll motorway companies in Spain

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  • Albalate, Daniel
  • Rosell, Jordi

Abstract

This paper uses stochastic frontier analyses to estimate the cost efficiency of toll motorway companies in Spain, disentangling between two types of efficiency: persistent efficiency, related to project building and sunk costs, and transient efficiency, more closely related to management efficiency. The differences between the two sources of efficiency are significant, allowing us to test how different regulations impact performance. We find that regional governments grant more efficient projects than those granted by central government, but we do not find significant differences in performance in relation to the public/private ownership share, following the privatization of publicly owned concessionaires or due to changes in price updating regulations (price cap). The motorways nationalized in the 1980s had lower persistent efficiency levels, while management seems to have had a limited role in promoting efficiency gains. Furthermore, our results support the existence of scale and density economies in Spain, showing that an increase in vehicle-kilometers is more important than extending the motorway.

Suggested Citation

  • Albalate, Daniel & Rosell, Jordi, 2019. "On the efficiency of toll motorway companies in Spain," Research in Transportation Economics, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:retrec:v:76:y:2019:i:c:s0739885919302598
    DOI: 10.1016/j.retrec.2019.100747
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    Cited by:

    1. Baños-Pino, José F. & Boto-García, David & Zapico, Emma, 2021. "Persistence and dynamics in the efficiency of toll motorways: The Spanish case," Efficiency Series Papers 2021/03, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    2. Baños-Pino, José F. & Boto-García, David & Zapico, Emma, 2022. "Persistence and dynamics in the efficiency of toll motorways: The Spanish case," Economics of Transportation, Elsevier, vol. 31(C).

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    More about this item

    Keywords

    Motorways; Efficiency; Stochastic frontier; Concessions; Infrastructure;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General

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