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Potential Gains from Mergers in Local Public Transport: An Efficiency Analysis Applied to Germany

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  • Matthias Walter
  • Astrid Cullmann

Abstract

We analyze potential gains from hypothetical mergers in local public transport using the non-parametric Data Envelopment Analysis with bias corrections by means of bootstrapping. Our sample consists of 41 public transport companies from Germany's most densely populated region, North Rhine-Westphalia. We merge them into geographically meaningful, larger units that operate partially on a joint tram network. Merger gains are then decomposed into individual technical efficiency, synergy and size effects following the methodology of Bogetoft and Wang [Bogetoft, P., Wang, D., 2005. Estimating the Potential Gains from Mergers. Journal of Productivity Analysis, 23(2), 145-171]. Our empirical findings suggest that substantial gains up to 16 percent of factor inputs are present, mainly resulting from synergy effects.

Suggested Citation

  • Matthias Walter & Astrid Cullmann, 2008. "Potential Gains from Mergers in Local Public Transport: An Efficiency Analysis Applied to Germany," Discussion Papers of DIW Berlin 832, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp832
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    References listed on IDEAS

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    7. Necmiddin Bagdadioglu & Catherine Waddams Price & Thomas Weyman-Jones, 2007. "Measuring Potential Gains from Mergers among Electricity Distribution Companies in Turkey using a Non-Parametric Model," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 83-110.
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    Cited by:

    1. Laura Carosi & Giovanna D’Inverno & Letizia Ravagli, 2014. "Global public spending efficiency in Tuscan municipalities," Discussion Papers 2014/175, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    2. Clementina Bruno & Fabrizio Erbetta & Giovanni Fraquelli & Anna Giolitti, 2014. "The efficiency effects of merging Italian water companies," ECONOMIA E DIRITTO DEL TERZIARIO, FrancoAngeli Editore, vol. 2014(3), pages 425-442.
    3. Soukopová Jana & Nemec Juraj & Matějová Lenka & Struk Michal, 2014. "Municipality Size and Local Public Services: Do Economies of Scale Exist ?," NISPAcee Journal of Public Administration and Policy, De Gruyter Open, vol. 7(2), pages 151-171, December.
    4. Bönisch, Peter & Haug, Peter & Illy, Annette & Schreier, Lukas, 2011. "Municipality Size and Efficiency of Local Public Services: Does Size Matter?," IWH Discussion Papers 18/2011, Halle Institute for Economic Research (IWH).
    5. Koppitz David & Půček Milan & Ochrana František & Plaček Michal, 2015. "Comparative Analysis of Selected Factors Affecting Heating Costs of Schools in Selected Balkan Countries," NISPAcee Journal of Public Administration and Policy, De Gruyter Open, vol. 8(1), pages 61-84, June.

    More about this item

    Keywords

    Merger; Public Transport; Efficiency; Data Envelopment Analysis;

    JEL classification:

    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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