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The Post Office vs. Parcel Delivery Companies: Competition Effects on Costs and Productivity

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  • Mizutani, Fumitoshi
  • Uranishi, Shuji

Abstract

The main purpose of this study is to evaluate whether the competition factor affects cost reduction or TFP growth, even when ownership is maintained by the public sector. For empirical investigation, we selected the parcel delivery market in Japan. Formerly monopolized by the Post Office, the parcel delivery market was dramatically affected by the entry of the privately owned Yamato in 1976, an event which saw the share of the Post Office begin its decline to only 14.9 percent by 1998. In this study, we estimate the total cost function of goods transported by using a pooled data set, and the hedonic specification of output is formulated in order to consider output characteristics. Our conclusion is that competition has contributed to cost reduction and TFP growth in the case of private companies but not in the case of the Post Office. Copyright 2003 by Kluwer Academic Publishers

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  • Mizutani, Fumitoshi & Uranishi, Shuji, 2003. "The Post Office vs. Parcel Delivery Companies: Competition Effects on Costs and Productivity," Journal of Regulatory Economics, Springer, vol. 23(3), pages 299-319, May.
    • Handle: RePEc:kap:regeco:v:23:y:2003:i:3:p:299-319
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    Cited by:

    1. Benassi, Corrado & Castellani, Massimiliano & Mussoni, Maurizio, 2016. "Price equilibrium and willingness to pay in a vertically differentiated mixed duopoly," Journal of Economic Behavior & Organization, Elsevier, vol. 125(C), pages 86-96.
    2. Massimo Filippini & Marika Zola, 2005. "Economies of scale and cost efficiency in the postal services: empirical evidence from Switzerland," Applied Economics Letters, Taylor & Francis Journals, vol. 12(7), pages 437-441.
    3. Yoshio Kamijo & Yasuhiko Nakamura, 2009. "Stable market structures from merger activities in mixed oligopoly with asymmetric costs," Journal of Economics, Springer, vol. 98(1), pages 1-24, September.
    4. Junichi Haraguchi & Toshihiro Matsumura, 2021. "Profit‐enhancing entries in mixed oligopolies," Southern Economic Journal, John Wiley & Sons, vol. 88(1), pages 33-55, July.
    5. Fumitoshi Mizutani & Eri Nakamura, 2017. "How do governance factors affect inefficiency? Stochastic frontier analysis of public utility firms in Japan," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 44(3), pages 267-289, September.
    6. Ishida, Junichiro & Matsushima, Noriaki, 2009. "Should civil servants be restricted in wage bargaining? A mixed-duopoly approach," Journal of Public Economics, Elsevier, vol. 93(3-4), pages 634-646, April.
    7. Fumitoshi Mizutani & Shuji Uranishi, 2006. "Special Post Office, Privatization and Universal Service Obligation Costs," Discussion Papers 2006-05, Kobe University, Graduate School of Business Administration.
    8. Ding Chen & Leonard F. S. Wang & Ji Sun, 2023. "Does CSR influence privatization wave?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(2), pages 1088-1097, March.
    9. Fumitoshi Mizutani & Shuji Uranishi & Eri Nakamura, 2014. "Postal Services: Governments and Firms' Perspective," Discussion Papers 2014-38, Kobe University, Graduate School of Business Administration.
    10. Mark Armstrong & David E.M. Sappington, 2006. "Regulation, Competition and Liberalization," Journal of Economic Literature, American Economic Association, vol. 44(2), pages 325-366, June.
    11. Juan Carlos Morales Piñero & Joaquim Vergés i Jaime, 2007. "Public Enterprise Reforms and Efficiency in Regulated Enviroments," Working Papers 0702, Departament Empresa, Universitat Autònoma de Barcelona, revised Jan 2007.
    12. Goto, Mika & Makhija, Anil K., 2007. "The Impact of Competition and Corporate Structure on Productive Efficiency: The Case of the U.S. Electric Utility Industry, 1990-2004," Working Paper Series 2007-10, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
    13. Massimo Filippini & Martin Koller & Urs Trinkner, 2010. "Do opening hours and unobserved heterogeneity affect economies of scale and scope in postal outlets?," Quaderni della facoltà di Scienze economiche dell'Università di Lugano 1007, USI Università della Svizzera italiana.
    14. Toshihiro Matsumura & Daisuke Shimizu, 2010. "Privatization Waves," Manchester School, University of Manchester, vol. 78(6), pages 609-625, December.
    15. Ding, Ji-Feng & Shyu, Wen-Hwa & Yeh, Chun-Tsen & Ting, Pi-Hui & Ting, Chung-Te & Lin, Chien-Pang & Chou, Chien-Chang & Wu, Su-Sin, 2016. "Assessing customer value for express service providers: An empirical study from shippers’ perspective in Taiwan," Journal of Air Transport Management, Elsevier, vol. 55(C), pages 203-212.
    16. Fumitoshi Mizutani & Eri Nakamura, 2016. "Factors Affecting Inefficiency Level: Stochastic Frontier Analysis of Public Utility Firms in Japan," Discussion Papers 2016-02, Kobe University, Graduate School of Business Administration.
    17. Ivana Nikolić & Jelena Milutinović & Darko Božanić & Momčilo Dobrodolac, 2023. "Using an Interval Type-2 Fuzzy AROMAN Decision-Making Method to Improve the Sustainability of the Postal Network in Rural Areas," Mathematics, MDPI, vol. 11(14), pages 1-26, July.
    18. Tochkov, Kiril, 2015. "The efficiency of postal services in the age of market liberalization and the internet: Evidence from Central and Eastern Europe," Utilities Policy, Elsevier, vol. 36(C), pages 35-42.
    19. Massimo Filippini & Martin Koller & Urs Trinkner, 2010. "Economies of scale and scope and opening hours in post offices and agencies," Chapters, in: Michael A. Crew & Paul R. Kleindorfer (ed.), Heightening Competition in the Postal and Delivery Sector, chapter 10, Edward Elgar Publishing.
    20. Fumitoshi Mizutani & Eri Nakamura, 2013. "Regulation, Competition, Diversification, Governance and Costs: An Empirical Analysis of Public Utility and Manufacturing Firms in Japan," Discussion Papers 2013-25, Kobe University, Graduate School of Business Administration.
    21. Fumitoshi Mizutani & Eri Nakamura, 2014. "What Most Affects A Firm' s Costs: Internal or External Factors, or Both?," Discussion Papers 2014-22, Kobe University, Graduate School of Business Administration.
    22. Iturralde, Maria José & Quirós, Cipriano, 2008. "Analysis of efficiency of the European postal sector," International Journal of Production Economics, Elsevier, vol. 114(1), pages 84-90, July.

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