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Separation versus Integration in International Rail Markets: A Theoretical Investigation

Author

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  • Friebel, Guido
  • Ivaldi, Marc
  • Pouyet, Jérôme

Abstract

This paper investigates various options for the organization of the railway industry when network operators require the access to multiple national networks to provide international (freight or passenger) transport services. The EU rail system provides a framework for our analysis. Returns-to-scale and the intensity of competition are key to understanding the impact of vertical integration or separation between infrastructure and operation services within each country in the presence of international transport services. We also consider an option in which a transnational infrastructure manager is in charge of offering a coordinated access to the national networks. In our model, it turns out to be an optimal industry structure.

Suggested Citation

  • Friebel, Guido & Ivaldi, Marc & Pouyet, Jérôme, 2011. "Separation versus Integration in International Rail Markets: A Theoretical Investigation," TSE Working Papers 11-248, Toulouse School of Economics (TSE), revised Mar 2013.
    • Handle: RePEc:tse:wpaper:24800
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    References listed on IDEAS

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    1. Bassanini, Anna & Pouyet, Jerome, 2005. "Strategic choice of financing systems in regulated and interconnected industries," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 233-259, February.
    2. Ivaldi, M & McCullough, G J, 2001. "Density and Integration Effects on Class I U.S. Freight Railroads," Journal of Regulatory Economics, Springer, vol. 19(2), pages 161-182, March.
    3. Fumitoshi Mizutani & Shuji Uranishi, 2013. "Does vertical separation reduce cost? An empirical analysis of the rail industry in European and East Asian OECD Countries," Journal of Regulatory Economics, Springer, vol. 43(1), pages 31-59, January.
    4. Per Agrell & Jerôme Pouyet, 2004. "The Regulation of Transborder Network Services," Working Papers 2004-38, Center for Research in Economics and Statistics.
    5. Borger Bruno De & Dunkerley Fay & Proost Stef, 2008. "The Interaction between Tolls and Capacity Investment in Serial and Parallel Transport Networks," Review of Network Economics, De Gruyter, vol. 7(1), pages 1-23, March.
    6. Pedro Cantos & José Manuel Pastor & Lorenzo Serrano, 2010. "Vertical and Horizontal Separation in the European Railway Sector and its Effects on Productivity," Journal of Transport Economics and Policy, University of Bath, vol. 44(2), pages 139-160, May.
    7. Ivaldi Marc & Mccullough Gerard, 2008. "Subadditivity Tests for Network Separation with an Application to U.S. Railroads," Review of Network Economics, De Gruyter, vol. 7(1), pages 1-13, March.
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    Cited by:

    1. Francisco Gildemir Ferreira Silva, 2022. "Brazilian railways separability infrastructure/operations: investigation by production indicators," SN Business & Economics, Springer, vol. 2(7), pages 1-25, July.

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    More about this item

    Keywords

    Regulation; competition; vertical integration; rail passenger transportation;
    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
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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