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Spatial non-price competition in port infrastructure services

Author

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  • Hidalgo-Gallego, Soraya
  • Núñez-Sánchez, Ramón
  • Coto-Millán, Pablo

Abstract

This study analyses the possible existence of spatial non-price competition in the port industry. We propose a dynamic two-stage model that allows: (1) to estimate the sensitivity of generation and diversion of traffic caused by port capacity expansions; (2) to quantify the degree of capacity competition; (3) to simulate a hypothetical scenario of cooperation agreements among different port authorities. The econometric specification is based on a structural model of demand, cost and market equilibrium. The empirical results suggest that non-price competition exists in port infrastructure services. Furthermore, using a simulation analysis, we show that incentives to invest in port capacity decrease under a cooperative setting.

Suggested Citation

  • Hidalgo-Gallego, Soraya & Núñez-Sánchez, Ramón & Coto-Millán, Pablo, 2017. "Spatial non-price competition in port infrastructure services," MPRA Paper 80417, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:80417
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    References listed on IDEAS

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    More about this item

    Keywords

    Strategic interdepence; imperfect competition; port capacity; port alliances;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L9 - Industrial Organization - - Industry Studies: Transportation and Utilities

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