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The Impact of the Concession of 14 Regional Greek Airports on Passenger Traffic

Author

Listed:
  • Svetoslav Danchev

    (Foundation for Economic and Industrial Research IOBE)

  • Nikos Paratsiokas

    (Foundation for Economic and Industrial Research IOBE)

  • Nikolaos Vettas

    (Foundation for Economic and Industrial Research IOBE
    Athens University of Economics and Business
    Centre for Economic Policy Research)

Abstract

Greece implemented an extensive privatization program in the past decade, which included the concession of 14 regional airports for a period of 40 years. The main goal of this paper is to assess the effects of the concession in terms of passenger traffic. For that purpose, we apply a “difference-in-differences” econometric analysis of passenger traffic before and after the concession, using traffic data from the reports of the Hellenic Civil Aviation Authority. As a control group, we use 24 regional airports that remained under state control. The econometric estimation indicates that the change in the management model of these airports has contributed significantly to the increase of passenger traffic. In particular, the coefficient of the variable used to interpret the effect of privatization on passenger traffic indicates that, controlling for heterogeneous trends and effects, passenger volume in the privatized airports was higher by 30% than what it would have been under state control. The results demonstrate that strengthening the private sector involvement in the development and operation of public infrastructure may have positive economic impact, particularly when it involves the entry of an experienced international strategic investor in asset development in a country undergoing a prolonged and deep economic crisis.

Suggested Citation

  • Svetoslav Danchev & Nikos Paratsiokas & Nikolaos Vettas, 2022. "The Impact of the Concession of 14 Regional Greek Airports on Passenger Traffic," Journal of Industry, Competition and Trade, Springer, vol. 22(1), pages 51-67, March.
  • Handle: RePEc:kap:jincot:v:22:y:2022:i:1:d:10.1007_s10842-021-00378-0
    DOI: 10.1007/s10842-021-00378-0
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    References listed on IDEAS

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    More about this item

    Keywords

    Airports; Privatization; Passenger traffic; Difference-in-differences;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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