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The determinants of efficiency and productivity in European railways

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  • Antonio Couto
  • Daniel Graham

Abstract

This article evaluates the economic performance of European railways over the period 1972 to 1999. The cost structure of the railway industry is analysed using a stochastic frontier approach estimated within the framework of a translog cost system. The results confirm that European railways experience significant cost increases due to inefficient behaviour. In contrast to previous studies, however, the estimates indicate a much greater role for allocative rather than technical inefficiency. Overall, inefficiencies can essentially be explained by the supply of excess capacity and by the over-employment of labour inputs. Regarding productivity, it appears to be technological progress, and not levels of efficiency or scale economies, that provide the most convincing explanation for variance in growth rates within the sample.

Suggested Citation

  • Antonio Couto & Daniel Graham, 2009. "The determinants of efficiency and productivity in European railways," Applied Economics, Taylor & Francis Journals, vol. 41(22), pages 2827-2851.
  • Handle: RePEc:taf:applec:v:41:y:2009:i:22:p:2827-2851
    DOI: 10.1080/00036840801949782
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    Citations

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    Cited by:

    1. Lourens Broersma & Arjen Edzes & Jouke van Dijk, 2011. "Have Dutch Municipalities Become More Efficient in Managing the Costs of Social Assistance Dependency? (refereed paper)," ERSA conference papers ersa10p177, European Regional Science Association.
    2. Arrigo, Ugo & Di Foggia, Giacomo, 2013. "Schemes and levels of state aid to rail industry in Europe: evidences from a cross-country comparison," MPRA Paper 67829, University Library of Munich, Germany.
    3. Santosh Kumar, Sahu & K., Narayanan, 2011. "Energy Intensity and Firm Performance: Do Energy Clusters Matter?," MPRA Paper 43457, University Library of Munich, Germany.
    4. Kwon, He-Boong, 2017. "Exploring the predictive potential of artificial neural networks in conjunction with DEA in railroad performance modeling," International Journal of Production Economics, Elsevier, vol. 183(PA), pages 159-170.
    5. Daniel Albalate & Jordi Rosell, 2016. "Persistent and transient efficiency on the stochastic production and cost frontiers – an application to the motorway sector," Working Papers XREAP2016-04, Xarxa de Referència en Economia Aplicada (XREAP), revised Oct 2016.
    6. Pittman, Russell, 2011. "Risk-averse restructuring of freight railways in China," Utilities Policy, Elsevier, vol. 19(3), pages 152-160.
    7. Pittman, Russell, 2016. "Reforming and Restructuring Ukrzaliznytsia: A Crucial Task for Ukrainian Reformers," MPRA Paper 76028, University Library of Munich, Germany.
    8. Pittman Russell, 2015. "Railways Restructuring and Ukrainian Economic Reform," Man and the Economy, De Gruyter, vol. 2(1), pages 87-107, June.
    9. Santosh Kumar Sahu, 2014. "Energy Use Patterns and Firm Performance: Evidence from Indian Industries," Working Papers 2014-092, Madras School of Economics,Chennai,India.
    10. Arrigo, Ugo & Di Foggia, Giacomo, 2013. "Assessing the railways subsidy in selected European countries: insights from the Italian case," MPRA Paper 67830, University Library of Munich, Germany.

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