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Diversification strategies and scope economies evidence from a sample of Italian bus transport providers

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Author Info
Ottoz Elisabetta () (University of Turin)
Di Giacomo Marina () (University of Turin)

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Abstract

A growing number of local public transport (LPT) companies diversify their production lines by providing a large set of services. We investigate the cost structure of a sample of LPT companies operating in Italy in order to assess the presence and the magnitude of scope economies. We split thewhole sample of firms according to the diversification strategy: private firms, mainly diversifying in competitive transport-related services and public firms providing non-transport services in regulated markets. Regardless of the functional form and the method used, scope economies appear sizeable for both groups but higher for firms pursuing a transport related strategy, suggesting it should be preferable to the multi-utility development pursued by public LPT firms.

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Paper provided by University of Turin in its series Department of Economics Working Papers with number 200802.

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Length: 33 pages
Date of creation: Feb 2008
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Handle: RePEc:uto:dipeco:200802

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