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Financial performance of airport terminal companies in Japan – Harmful effects of government participation

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  • Usami, Munekatsu
  • Akai, Nobuo

Abstract

This paper analyzes the managerial performance of domestic airport terminal buildings in Japan. Japanese airports have been constructed all over the country under the Special Account for Airport Development but few are profitable. Public-private partnership third party companies manage most terminal buildings. We show that government participation in the capitalization and governance of terminal building companies has fostered practices that impair their performance. In particular we find that airport terminal companies whose executive boards include larger fractions of retired government bureaucrats, and whose staffs include larger fractions of government workers on temporary assignment, have lower profit. We also show that terminal building companies that are audited tend to be more profitable than ones that are not.

Suggested Citation

  • Usami, Munekatsu & Akai, Nobuo, 2012. "Financial performance of airport terminal companies in Japan – Harmful effects of government participation," Journal of Air Transport Management, Elsevier, vol. 25(C), pages 40-43.
    • Handle: RePEc:eee:jaitra:v:25:y:2012:i:c:p:40-43
    DOI: 10.1016/j.jairtraman.2012.07.001
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    References listed on IDEAS

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    1. Zhang, Anming & Zhang, Yimin, 2003. "Airport charges and capacity expansion: effects of concessions and privatization," Journal of Urban Economics, Elsevier, vol. 53(1), pages 54-75, January.
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