Measuring Market Concentration in the Aegean Ferry System
The paper calculates the concentration in 6 major routes of the ‘Greek ferry system’ (2001-2010), important not only for international tourism, including Cruises, but also for the cohesion of the Greek space with EU. Worth noting is the consolidation of companies that took place, where from 25 companies operated (prior of 1994) to 5 groups (by 2012). This was due to: (1) the abolition of ‘cabotage’ (i.e. the right to restrict coastal services to national-flagged ships) by EU. The relevant legislation passed in 1992 with a long transition period (1992-2004), and (2) the listing of ferry companies in Athens Stock Exchange. Frequent buy-outs increased the monopoly power of companies involved. The Greek ferry system was a par excellence state-regulated one since 1976, with State issuing licenses and determining fares, but failing to control quality. A measure of monopoly power was calculated, based on the work of Lerner, Herfindahl and Hirschman, known as the ‘Hirschman-Herfindahl Index’. After a brief examination of what is meant by ‘market’, we provided the values of HHI for the 6 routes: (1) Piraeus-Crete, (2) Piraeus-Chios-Mytilene, (3) Crete (Iraklion)-Piraeus, (4) Piraeus-Crete (Rethymno), (5) Piraeus-Dodecanese and (6) Piraeus-Cyclades. These show a distinct pattern of oligopoly/monopoly, with the traffic concentrated in a small group of companies. We argue that the number of ships of different companies in one route determines the market. Neither partial (2002) or full (2006) deregulation had any effect in increasing competition, as expected, with the temporal exception in one or two cases. Moreover, Greek authorities had not prepared properly for deregulation and as a result failed either to prevent monopolies or to create the effective antitrust regulation like in USA.
Volume (Year): 62 (2012)
Issue (Month): 1-2 (January - June)
|Contact details of provider:|| Postal: |
Phone: +41 21 693 0036
Fax: +41 21 693 0020
Web page: http://spoudai.unipi.gr
More information through EDIRC
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.:
- Encaoua, David & Jacquemin, Alexis, 1980. "Degree of Monopoly, Indices of Concentration and Threat of Entry," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 87-105, February.
- Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, June.
- Saving, Thomas R, 1970. "Concentration Ratios and the Degree of Monopoly," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 11(1), pages 139-46, February.
- Curry, B & George, K D, 1983. "Industrial Concentration: A Survey," Journal of Industrial Economics, Wiley Blackwell, vol. 31(3), pages 203-55, March.
- Cowling, Keith & Waterson, Michael, 1976. "Price-Cost Margins and Market Structure," Economica, London School of Economics and Political Science, vol. 43(171), pages 267-74, August.
- Petersen, Mitchell A & Rajan, Raghuram G, 1995.
"The Effect of Credit Market Competition on Lending Relationships,"
The Quarterly Journal of Economics,
MIT Press, vol. 110(2), pages 407-43, May.
- Mitchell A. Petersen & Raghuram G. Rajan, 1994. "The Effect of Credit Market Competition on Lending Relationships," NBER Working Papers 4921, National Bureau of Economic Research, Inc.
- Lijesen, Mark G., 2004. "Adjusting the Herfindahl index for close substitutes: an application to pricing in civil aviation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 40(2), pages 123-134, March.
- Arnoud W. A. Boot & Anjan V. Thakor, 2000.
"Can Relationship Banking Survive Competition?,"
Journal of Finance,
American Finance Association, vol. 55(2), pages 679-713, 04.
- Daniel F. Spulber, 1989. "Regulation and Markets," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262192756, June.
When requesting a correction, please mention this item's handle: RePEc:spd:journl:v:62:y:2012:i:1-2:p:7-27. 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: (SPOUDAI Journal of Economics and Business)
If references are entirely missing, you can add them using this form.