Relative size and technical efficiency in peripheral port markets: evidence from Irish and North Atlantic Spanish ports
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Relative size and technical efficiency in peripheral port markets: evidence from Irish and North Atlantic Spanish ports Stephen Hynes1 · Ingrid Mateo‑Mantecón2 · Eamonn O’Connor1 · Andreas Tsakiridis1
© Springer Nature Limited 2019
Abstract In peripheral port markets, a limited volume of traffic creates challenges in sustaining multiple competing port authorities (PAs). With a limited size, smaller ports have difficulty in attracting the necessary traffic flows to leverage capital for development. In many European jurisdictions, recent policy reform has sought to concentrate resources in dominant ports or amalgamate smaller PAs to increase competitiveness and rationalise investments. This paper formally examines the link between port size and achievable efficiencies through an efficiency analysis of Irish and Atlantic Spanish ports. To achieve this, the paper applies a two-step, doublebootstrap data envelopment analysis (DEA) approach to examine the effect of relative size on technical efficiency across the two port systems during the period 2000–2015. The results indicate a positive relationship between size and technical efficiency amongst ports in peripheral regions. As the time period covers the last global financial crisis, it is possible to further explore the effect of the recession and subsequent contraction in the market for port services on the relationship between size and technical efficiency. The findings indicate that the effect of size on technical efficiency becomes even stronger when market contraction is accounted for. Results also show that the efficiency gap between the larger and smaller ports increased considerably after the recession. Keywords Data envelopment analysis · Port authorities · Peripheral port markets · Simar and Wilson approach
* Eamonn O’Connor [email protected] 1
Socio‑Economic Marine Research Unit (SEMRU), National University of Ireland Galway, Newcastle Road, Galway, Ireland
2
Department of Economics, University of Cantabria, Cantabria, Spain
Vol.:(0123456789)
Maritime Economics & Logistics
1 Introduction Achieving efficiencies in the production of port services is recognised as a key goal of regional and national policy makers around the world due to the importance of maritime transport in international trade (Brooks and Cullinane 2006). A key mechanism for achieving efficiencies has been the reform of port authorities (PAs) who are responsible for the regulation and development of port infrastructure. The dominant paradigm has been the corporatisation of PAs, with public ownership retained and responsibility devolved to commercially orientated semi-state bodies (de Langen and Heij 2014; Brooks et al. 2017). Private sector participation under this approach is facilitated by public–private partnership mechanisms (most frequently involving licensing and concession contracts). The promotion of competition between autonomous PAs and the intended associated benefits are the key components of reform in many jurisdictions (Ng and Pallis 2010).1 Amongst the ma
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