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Deregulation and the determinants of entry: Evidence from the German interurban bus industry

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  • Dürr, Niklas S.
  • Hüschelrath, Kai

Abstract

Two years after the deregulation of the German interurban bus industry in January 2013, two new entrants emerged as market leaders: MeinFernbus (MFB) and FlixBus (FB). We use a comprehensive route-level data set to investigate the determinants of route entry for both providers. Applying survival models, we find that both companies show an increased probability to enter populous, centrally located routes with large shares of young inhabitants; however, they both avoid entries into routes including an airport or with low quality rail connection. Furthermore, both market leaders refrain from entering small and medium-sized routes in which another provider is already operating. In large markets, however, they both show an increased entry probability independent of the presence of a competitor.

Suggested Citation

  • Dürr, Niklas S. & Hüschelrath, Kai, 2016. "Deregulation and the determinants of entry: Evidence from the German interurban bus industry," ZEW Discussion Papers 16-054, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:16054
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    References listed on IDEAS

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    More about this item

    Keywords

    deregulation; entry; industry dynamics; interurban buses; survival analysis;
    All these keywords.

    JEL classification:

    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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