Hub port competition and welfare effects of strategic privatization
Private operation of port facilities is becoming increasingly common worldwide. We investigate the effect of port privatization in a setting with two ports located in different countries, each serving their home market but also competing for the transshipment traffic from a third region. Each government chooses whether to privatize its port or to keep port operations public. We show that there exist equilibria in which the two governments choose privatization and the national welfare of each port country is higher relative to a situation where ports are public. This is because privatization is a commitment to increase charges relative to public port charges, which allows for a better exploitation of the third region. For some parameter regions, port countries non-cooperatively choose public port operations, while they would be better off if both ports were private. However, customers of the third region are always better off if port operations are public. We further show that the port country with the smaller home market has a relatively strong incentive to choose private port operation.
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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
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.:
- Toshihiro Matsumura & Noriaki Matsushima, 2012.
"Airport Privatization And International Competition,"
The Japanese Economic Review,
Japanese Economic Association, vol. 63(4), pages 431-450, December.
- Toshihiro Matsumura & Noriaki Matsushima, 2010. "Airport privatization and international competition," ISER Discussion Paper 0792, Institute of Social and Economic Research, Osaka University.
- De Borger, Bruno & Proost, Stef, 2012. "Transport policy competition between governments: A selective survey of the literature," Economics of Transportation, Elsevier, vol. 1(1), pages 35-48.
- DE BORGER, Bruno & PROOST, Stef, 2012. "Transport policy competition between governments: A selective survey of the literature," Working Papers 2012014, University of Antwerp, Faculty of Applied Economics.
- Fershtman, Chaim & Judd, Kenneth L, 1987. "Equilibrium Incentives in Oligopoly," American Economic Review, American Economic Association, vol. 77(5), pages 927-940, December.
- Chaim Fershtman & Kenneth L Judd, 1984. "Equilibrium Incentives in Oligopoly," Discussion Papers 642, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Bruno De Borger & Stef Proost & Kurt Van Dender, 2008. "Private Port Pricing and Public Investment in Port and Hinterland Capacity," Journal of Transport Economics and Policy, University of Bath, vol. 42(3), pages 527-561, September.
- DE BORGER, Bruno & PROOST, Stef & VAN DENDER, Kurt, 2007. "Private port pricing and public investment in port and hinterland capacity," Working Papers 2007019, University of Antwerp, Faculty of Applied Economics.
- Bruno De Borger & Stef Proost & Kurt Van Dender, 2007. "Private port pricing and public investment in port and Hinterland capacity," Working Papers Department of Economics ces0708, KU Leuven, Faculty of Economics and Business, Department of Economics.
- Yulai Wan & Anming Zhang, 2013. "Urban Road Congestion and Seaport Competition," Journal of Transport Economics and Policy, University of Bath, vol. 47(1), pages 55-70, January.
- Ali Dadpay & John S. Heywood, 2006. "Mixed Oligopoly In A Single International Market ," Australian Economic Papers, Wiley Blackwell, vol. 45(4), pages 269-280, December.
- Ken Hendricks & Michele Piccione & Guofu Tan, 1999. "Equilibria in Networks," Econometrica, Econometric Society, vol. 67(6), pages 1407-1434, November.
- Hendricks, K. & Piccione, M. & Tan, G., 1997. "Equilibria in networks," Discussion Paper Series In Economics And Econometrics 9717, Economics Division, School of Social Sciences, University of Southampton.
- Toshihiro Matsumura & Noriaki Matsushima, 2012. "Locating Outside A Linear City Can Benefit Consumers," Journal of Regional Science, Wiley Blackwell, vol. 52(3), pages 420-432, 08.
- Lihua Han & Hikaru Ogawa, 2008. "Economic Integration and Strategic Privatization in an International Mixed Oligopoly," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 64(3), pages 352-363, September.
- Matsushima, Noriaki & Takauchi, Kazuhiro, 2014. "Port privatization in an international oligopoly," Transportation Research Part B: Methodological, Elsevier, vol. 67(C), pages 382-397.
- Noriaki Matsushima & Kazuhiro Takauchi, 2013. "Port Privatization in an International Oligopoly," ISER Discussion Paper 0864, Institute of Social and Economic Research, Osaka University.
- Christopher M. Anderson & Yong-An Park & Young-Tae Chang & Chang-Ho Yang & Tae-Woo Lee & Meifeng Luo, 2008. "A game-theoretic analysis of competition among container port hubs: the case of Busan and Shanghai 1," Maritime Policy & Management, Taylor & Francis Journals, vol. 35(1), pages 5-26, February.
- Brander, James A. & Spencer, Barbara J., 1985. "Export subsidies and international market share rivalry," Journal of International Economics, Elsevier, vol. 18(1-2), pages 83-100, February.
- James A. Brander & Barbara J. Spencer, 1984. "Export Subsidies and International Market Share Rivalry," NBER Working Papers 1464, National Bureau of Economic Research, Inc.
- Mori, Tomoya & Nishikimi, Koji, 2002. "Economies of transport density and industrial agglomeration," Regional Science and Urban Economics, Elsevier, vol. 32(2), pages 167-200, March.
- Andrew Yuen & Leonardo J. Basso & Anming Zhang, 2008. "Effects of Gateway Congestion Pricing on Optimal Road Pricing and Hinterland," Journal of Transport Economics and Policy, University of Bath, vol. 42(3), pages 495-526, September.
- Takahashi, Takaaki, 2004. "Spatial competition of governments in the investment on public facilities," Regional Science and Urban Economics, Elsevier, vol. 34(4), pages 455-488, July.
- de Fraja, Giovanni & Delbono, Flavio, 1989. "Alternative Strategies of a Public Enterprise in Oligopoly," Oxford Economic Papers, Oxford University Press, vol. 41(2), pages 302-311, April.
- Tongzon, Jose & Heng, Wu, 2005. "Port privatization, efficiency and competitiveness: Some empirical evidence from container ports (terminals)," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(5), pages 405-424, June. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eee:ecotra:v:3:y:2014:i:3:p:211-220. 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: (Dana Niculescu)
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.