Advanced Search
MyIDEAS: Login

Economies of Scope in European Railways: An Efficiency Analysis

Contents:

Author Info

  • Christian Growitsch

    ()
    (Halle Institute for Economic Research)

  • Heike Wetzel

    ()
    (Energiewirtschaftliches Institut an der Universität zu Köln, Germany)

Abstract

In the course of railway reforms at the end of the last century, European na- tional governments, as well the EU Commission, decided to open markets and to separate railway networks from train operations. Vertically integrated railway com- panies argue that such a separation of infrastructure and operations would diminish the advantages of vertical integration and would therefore not be suitable to raise economic welfare. In this paper, we conduct a pan-European analysis to investi- gate the performance of European railways with a particular focus on economies of scope associated with vertical integration. We test the hypothesis that integrated railways realize economies of joint production and, thus, produce railway services on a higher level of efficiency. To determine whether joint or separate production is more efficient we apply an innovative Data Envelopment Analysis super-efficiency bootstrapping model which relates the efficiency for integrated production to a vir- tual reference set consisting of the separated production technology and which is applicable to other network industries as energy and telecommunication as well. Our findings are that for a majority of European Railway companies economies of scope exist.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.leuphana.de/fileadmin/user_upload/Forschungseinrichtungen/ifvwl/WorkingPapers/wp_29_Upload.pdf
Download Restriction: no

Bibliographic Info

Paper provided by University of Lüneburg, Institute of Economics in its series Working Paper Series in Economics with number 29.

as in new window
Length: 25 pages
Date of creation: Jul 2006
Date of revision:
Handle: RePEc:lue:wpaper:29

Contact details of provider:
Web page: http://leuphana.de/institute/ivwl.html

Related research

Keywords: Efficiency; Vertical Integration; Railway Industry;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Jamasb, T. & Pollitt, M., 2001. "International Benchmarking and Yardstick Regulation: An Application to European Electricity Utilities," Cambridge Working Papers in Economics 0115, Faculty of Economics, University of Cambridge.
  2. Diego Prior & Magda Solà, 2000. "Technical efficiency and economies of diversification in health care," Health Care Management Science, Springer, vol. 3(4), pages 299-307, September.
  3. Pittman Russell, 2005. "Structural Separation to Create Competition? The Case of Freight Railways," Review of Network Economics, De Gruyter, vol. 4(3), pages 1-16, September.
  4. Léopold Simar & Paul Wilson, 2000. "Statistical Inference in Nonparametric Frontier Models: The State of the Art," Journal of Productivity Analysis, Springer, vol. 13(1), pages 49-78, January.
  5. Knieps, Günter, 2004. "Privatisation of Network Industries in Germany : A Disaggregated Approach," Discussion Papers 100, University of Freiburg, Institute for Transport Economics and Regional Policy.
  6. José Manuel Pastor Monsálvez & Lorenzo Serrano Martínez & Pedro Cantos, 2002. "Cost And Revenue Inefficiencies In The European Railways," Working Papers. Serie EC 2002-10, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  7. Friebel, Guido & Ivaldi, Marc & Vibes, Catherine, 2004. "Railway (De)Regulation: A European Efficiency Comparison," CEPR Discussion Papers 4319, C.E.P.R. Discussion Papers.
  8. Günter Knieps, 2004. "Privatisation of Network Industries in Germany: A Disaggregated Approach," CESifo Working Paper Series 1188, CESifo Group Munich.
  9. Coelli, Tim & Perelman, Sergio, 1999. "A comparison of parametric and non-parametric distance functions: With application to European railways," European Journal of Operational Research, Elsevier, vol. 117(2), pages 326-339, September.
  10. Kittelsen, Sverre A.C. & Magnussen, Jon, 2009. "Economies of scope in Norwegian hospital production - A DEA analysis," HERO On line Working Paper Series 2003:8, Oslo University, Health Economics Research Programme.
  11. Ivaldi, Marc & McCullough, Gerard, 2004. "Subadditivity Tests for Network Separation with an Application to US Railroads," CEPR Discussion Papers 4392, C.E.P.R. Discussion Papers.
  12. Léopold Simar & Paul W. Wilson, 1998. "Sensitivity Analysis of Efficiency Scores: How to Bootstrap in Nonparametric Frontier Models," Management Science, INFORMS, vol. 44(1), pages 49-61, January.
  13. Tim Coelli & Sergio Perelman, 2000. "Technical efficiency of European railways: a distance function approach," Applied Economics, Taylor & Francis Journals, vol. 32(15), pages 1967-1976.
  14. John D. Bitzan, 2003. "Railroad Costs and Competition: The Implications of Introducing Competition to Railroad Networks," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 37(2), pages 201-225, May.
  15. Jamasb, Tooraj & Pollitt, Michael, 2003. "International benchmarking and regulation: an application to European electricity distribution utilities," Energy Policy, Elsevier, vol. 31(15), pages 1609-1622, December.
  16. Pedro Cantos & José Pastor & Lorenzo Serrano, 1999. "Productivity, efficiency and technical change in the European railways: A non-parametric approach," Transportation, Springer, vol. 26(4), pages 337-357, November.
  17. Gathon, H.-J. & Pestieau, P., . "Decomposing efficiency into its managerial and its regulatory components: The case of European railways," CORE Discussion Papers RP -1133, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  18. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
  19. Cantos Sánchez, P., 2001. "Vertical relationships for the European railway industry," Transport Policy, Elsevier, vol. 8(2), pages 77-83, April.
  20. Ferrier, Gary D. & Grosskopf, Shawna & Hayes, Kathy J. & Yaisawarng, Suthathip, 1993. "Economies of diversification in the banking industry : A frontier approach," Journal of Monetary Economics, Elsevier, vol. 31(2), pages 229-249, April.
  21. Andrew S. J. Smith, 2006. "Are Britain's Railways Costing Too Much? Perspectives Based on TFP Comparisons with British Rail 1963-2002," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 40(1), pages 1-44, January.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. R. Pittman, 2009. "Railway Mergers and Railway Alliances: Competition Issues and Lessons for Other Network Industries," Competition and Regulation in Network Industries, Intersentia, vol. 10(3), pages 259-279, September.
  2. Pittman, Russell, 2011. "Risk-averse restructuring of freight railways in China," Utilities Policy, Elsevier, vol. 19(3), pages 152-160.
  3. Russell Pittman, 2009. "Competition Issues in Restructuring Ports and Railways, Including Brief Consideration of these Sectors in India," EAG Discussions Papers 200906, Department of Justice, Antitrust Division.
  4. Krol, Marcin, 2009. "Benefits and Costs of vertical Separation in Network Industries. The Case of Railway Transport in the European Environment," MPRA Paper 23815, University Library of Munich, Germany.
  5. Russell Pittman, 2007. "Make or buy on the Russian railway? Coase, Williamson, and Tsar Nicholas II," Economic Change and Restructuring, Springer, vol. 40(3), pages 207-221, September.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:lue:wpaper:29. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Wagner).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.