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Do Competition and Ownership Matter? Evidence from Local Public Transport in Europe

  • Marcella Nicolini

    (Fondazione Eni Enrico Mattei)

  • Andrea Boitani

    (Catholic University)

  • Carlo Scarpa

    (University of Brescia and Fondazione Eni Enrico Mattei)

This paper investigates how the ownership and the procedure for the selection of firms operating in the local public transport sector affect their productivity. In order to compare different institutional regimes, we carry out a comparative analysis of 72 companies operating in large European cities. This allows us to consider firms selected either through competitive tendering or negotiated procedures. The analysis of the data on 77 European firms over the period 1997-2006 indicates that firms operate under constant returns to scale. Retrieving the residuals we obtain a measure of total factor productivity, which we regress on firm and city characteristics. We find that when firms are totally or partially in public hands their productivity is lower. Moreover, firms selected through competitive tendering display higher total factor productivity.

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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2010.9.

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Date of creation: Jan 2010
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Handle: RePEc:fem:femwpa:2010.9
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