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Preventing competition because of “solidarity”: Rhetoric and reality of airport investments in Spain

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Author Info
Germà Bel (University of Barcelona)
Xavier Fageda (University of Barcelona)

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Abstract

Spain is the only large European country in which airport management is strictly centralized and publicly owned. This peculiar institutional setting prevents competition among Spanish airports, and policy makers and bureaucrats in charge of the system regularly justify it on grounds of interterritorial solidarity. This paper tests whether allocation of investments in airports is effectively based on redistributive purposes, as claimed and looks at other factors to explain such allocation. Our empirical analysis suggests that neither a progressive redistribution target nor the scale economies criterion explain allocation decisions. Instead, we find that political factors have significant influence on the allocation decisions made by the government.

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Publisher Info
Paper provided by EconWPA in its series Public Economics with number 0511012.

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Length: 25 pages
Date of creation: 16 Nov 2005
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Handle: RePEc:wpa:wuwppe:0511012

Note: Type of Document - pdf; pages: 25
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Web page: http://129.3.20.41

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Related research
Keywords: Public Enterprise; Legal monopolies; Air Transportation; Models with Panel Data;

Find related papers by JEL classification:
L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises
L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data

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    Other versions:
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