Competition and horizontal integration in maritime freight transport
This paper develops a theoretical model for freight transport characterized by competition between means of transport (the road and maritime sectors), where modes are perceived as differentiated products. Competitive behavior is assumed in the road freight sector, and there are constant returns to scale. In contrast, the freight maritime sector is characterized by oligopolistic behavior, where shipping lines enjoy economies of scale. The market equilibrium where the shipping lines behave as profit maximizers, provides a first approximation to the determinants of market shares, profits, and user welfare. We then characterize the equilibrium when horizontal integration of shipping lines occurs, with and without further economies of scale. An empirical application to the routes Valencia-Antwerp and Valencia-Genoa uncovers that the joint profit of the merged firms and social welfare always increase. However, user surplus only increases when economies of scale are significantly exploited.
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.:
- Anming Zhang, 2008. "The Impact of Hinterland Access Conditions on Rivalry between Ports," OECD/ITF Joint Transport Research Centre Discussion Papers 2008/8, OECD Publishing.
- Joseph Farrell and Carl Shapiro., 1988.
"Horizontal Mergers: An Equilibrium Analysis,"
Economics Working Papers
8880, University of California at Berkeley.
- Farrell, J. & Shapiro, C., 1988. "Horizontal Mergers: An Equilibrium Analysis," Papers 17, Princeton, Woodrow Wilson School - Discussion Paper.
- Farrell, Joseph & Shapiro, Carl, 1988. "Horizontal Mergers: An Equilibrium Analysis," Department of Economics, Working Paper Series qt0tp305nx, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Zhang, Anming & Zhang, Yimin, 2006. "Rivalry between strategic alliances," International Journal of Industrial Organization, Elsevier, vol. 24(2), pages 287-301, March.
- Brueckner, Jan K. & Spiller, Pablo T., 1991. "Competition and mergers in airline networks," International Journal of Industrial Organization, Elsevier, vol. 9(3), pages 323-342, September.
- Dongping Song * & Jie Zhang & Jonathan Carter & Tony Field & James Marshall & John Polak & Kimberly Schumacher & Proshun Sinha-Ray & John Woods, 2005. "On cost-efficiency of the global container shipping network," Maritime Policy & Management, Taylor & Francis Journals, vol. 32(1), pages 15-30, January.
- Park, Jong-Hun & Zhang, Anming & Zhang, Yimin, 2001. "Analytical models of international alliances in the airline industry," Transportation Research Part B: Methodological, Elsevier, vol. 35(9), pages 865-886, November.
- Photis M. Panayides, 2003. "Competitive strategies and organizational performance in ship management," Maritime Policy & Management, Taylor & Francis Journals, vol. 30(2), pages 123-140, January.
- DE BORGER, Bruno & PROOST, Stef & VAN DENDER, Kurt, 2007.
"Private port pricing and public investment in port and hinterland capacity,"
2007019, University of Antwerp, Faculty of Applied Economics.
- Bruno De Borger & Stef Proost & Kurt Van Dender, 2008. "Private Port Pricing and Public Investment in Port and Hinterland Capacity," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 42(3), pages 527-561, September.
- Bruno De Borger & Stef Proost & Kurt Van Dender, 2007. "Private port pricing and public investment in port and Hinterland capacity," Center for Economic Studies - Discussion papers ces0708, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
- Beuthe, Michel & Jourquin, Bart & Geerts, Jean-François & Koul à Ndjang' Ha, Christian, 2001. "Freight transportation demand elasticities: a geographic multimodal transportation network analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 37(4), pages 253-266, August.
- Adler, Nicole & Smilowitz, Karen, 2007. "Hub-and-spoke network alliances and mergers: Price-location competition in the airline industry," Transportation Research Part B: Methodological, Elsevier, vol. 41(4), pages 394-409, May.
- McAfee, R Preston & Williams, Michael A, 1992. "Horizontal Mergers and Antitrust Policy," Journal of Industrial Economics, Wiley Blackwell, vol. 40(2), pages 181-87, June.
- Zhang, Anming & Lang, Chunmei & Hui, Y.V. & Leung, Lawrence, 2007. "Intermodal alliance and rivalry of transport chains: The air cargo market," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 43(3), pages 234-246, May.
- Eddy van de Voorde & Thierry Vanelslander, 2009. "Market Power and Vertical and Horizontal Integration in the Maritime Shipping and Port Industry," OECD/ITF Joint Transport Research Centre Discussion Papers 2009/2, OECD Publishing.
- HEAVER, T. & MEERSMAN, Hilde & MOGLIA, F. & VAN DE VOORDE ,Eddy, . "Do mergers and alliances influence European shipping and port competition?," Working Papers 2000001, University of Antwerp, Faculty of Applied Economics.
- Brueckner, Jan K., 2001. "The economics of international codesharing: an analysis of airline alliances," International Journal of Industrial Organization, Elsevier, vol. 19(10), pages 1475-1498, December.
- Flores-Fillol, Ricardo, 2009. "Airline competition and network structure," Transportation Research Part B: Methodological, Elsevier, vol. 43(10), pages 966-983, December.
When requesting a correction, please mention this item's handle: RePEc:fda:fdaddt:2010-13. 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: (Carmen Arias)
If references are entirely missing, you can add them using this form.