IDEAS home Printed from https://ideas.repec.org/a/eee/transa/v54y2013icp14-25.html
   My bibliography  Save this article

Investigating European railway managers’ perception of transaction costs at the train operation/infrastructure interface

Author

Listed:
  • Merkert, Rico
  • Nash, Chris A.

Abstract

This paper discusses the effects of institutional organisation on the transactions and interactions between train operators and infrastructure managers in the three most liberalised rail systems in Europe, namely Britain, Germany and Sweden. The heart of the analysis is a major in-depth interview programme with 81 senior rail managers in 2008 followed by a survey of the same managers 4years later (2012/2013). Our results reveal how rail managers perceive their transactions in the real world as opposed to pure transaction cost theory. For both snapshots, co-ordination and contractual aspects particularly related to timetabling and real time operations are seen as more crucial than the traditional investment hold up or lock in transaction cost economics issues. In all three systems good relationships are indicated as the most important contributor to making the system work. It does appear that having many of these issues resolved internally by members of a single group simplifies the transactions considerably. But there is a cost to this when competition is desirable, as it creates greater uncertainty and fear of discrimination on behalf of those train operators outside the group.

Suggested Citation

  • Merkert, Rico & Nash, Chris A., 2013. "Investigating European railway managers’ perception of transaction costs at the train operation/infrastructure interface," Transportation Research Part A: Policy and Practice, Elsevier, vol. 54(C), pages 14-25.
    • Handle: RePEc:eee:transa:v:54:y:2013:i:c:p:14-25
    DOI: 10.1016/j.tra.2013.07.014
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0965856413001365
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tra.2013.07.014?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Steven Tadelis & Oliver E.Williamson, 2012. "Transaction Cost Economics [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    2. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    3. Pittman Russell, 2005. "Structural Separation to Create Competition? The Case of Freight Railways," Review of Network Economics, De Gruyter, vol. 4(3), pages 1-16, September.
    4. Williamson, Oliver E., 2005. "Transaction cost economics and business administration," Scandinavian Journal of Management, Elsevier, vol. 21(1), pages 19-40, March.
    5. Christian Growitsch & Heike Wetzel, 2009. "Testing for Economies of Scope in European Railways: An Efficiency Analysis," Journal of Transport Economics and Policy, University of Bath, vol. 43(1), pages 1-24, January.
    6. Rico Merkert & Andrew S. J. Smith & Chris A. Nash, 2012. "The Measurement of Transaction Costs - Evidence from European Railways," Journal of Transport Economics and Policy, University of Bath, vol. 46(3), pages 349-365, September.
    7. Guido Friebel & Marc Ivaldi & Catherine Vibes, 2010. "Railway (De)Regulation: A European Efficiency Comparison," Economica, London School of Economics and Political Science, vol. 77(305), pages 77-91, January.
    8. Pedro Cantos & José Manuel Pastor & Lorenzo Serrano, 2010. "Vertical and Horizontal Separation in the European Railway Sector and its Effects on Productivity," Journal of Transport Economics and Policy, University of Bath, vol. 44(2), pages 139-160, May.
    9. Yvrande-Billon, Anne & Menard, Claude, 2005. "Institutional constraints and organizational changes: the case of the British rail reform," Journal of Economic Behavior & Organization, Elsevier, vol. 56(4), pages 675-699, April.
    10. Cantos Sánchez Pedro & Pastor Monsálvez José Manuel & Serrano Martínez Lorenzo, 2008. "Vertical and Horizontal Separation in the European Railway Sector: Effects on Productivity," Working Papers 201065, Fundacion BBVA / BBVA Foundation.
    11. David Tyrrall & David Parker, 2005. "The Fragmentation of a Railway: A Study of Organizational Change," Journal of Management Studies, Wiley Blackwell, vol. 42(3), pages 507-537, May.
    12. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
    13. David Starkie, 1993. "Train service co-ordination in a competitive market," Fiscal Studies, Institute for Fiscal Studies, vol. 14(2), pages 53-64, May.
    14. Joskow, Paul L, 1987. "Contract Duration and Relationship-Specific Investments: Empirical Evidence from Coal Markets," American Economic Review, American Economic Association, vol. 77(1), pages 168-185, March.
    15. John D. Bitzan, 2003. "Railroad Costs and Competition: The Implications of Introducing Competition to Railroad Networks," Journal of Transport Economics and Policy, University of Bath, vol. 37(2), pages 201-225, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Merkert, Rico & Mulley, Corinne & Hakim, Md Mahbubul, 2018. "Trade-offs between transaction cost, operation cost and innovation in the context of procurement and asset specificity – The example of the bus industry," Research in Transportation Economics, Elsevier, vol. 69(C), pages 173-179.
    2. Nakamura, Eri & Sakai, Hiroki & Shoji, Kenichi, 2018. "Managerial transfers to reduce transaction costs among affiliated firms: Case study of Japanese railway holding companies," Utilities Policy, Elsevier, vol. 53(C), pages 102-110.
    3. Nakamura, Eri & Sakai, Hiroki, 2020. "Does vertical integration facilitate coordination between infrastructure management and train operating units in the rail sector? Implications for Japanese railways," Utilities Policy, Elsevier, vol. 66(C).
    4. Merkert, Rico & Hakim, Md Mahbubul, 2022. "Travel agency transaction costs in airline value chains – A risk in distribution channels in South Asia?," Annals of Tourism Research, Elsevier, vol. 95(C).
    5. Bošković, Branislav & Bugarinović, Mirjana, 2015. "Why and how to manage the process of liberalization of a regional railway market: South-Eastern European case study," Transport Policy, Elsevier, vol. 41(C), pages 50-59.
    6. Tsai, Ming-Chih & Merkert, Rico & Tsai, Mei-Ting & Lin, Shiau-Chi, 2021. "Towards a taxonomy-based preferred-customer model for suppliers in air cargo express service markets," Journal of Air Transport Management, Elsevier, vol. 90(C).
    7. Merkert, Rico & Hensher, David A., 2014. "Open access for railways and transaction cost economics – Management perspectives of Australia's rail companies," Research in Transportation Economics, Elsevier, vol. 48(C), pages 227-236.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Merkert, Rico & Hensher, David A., 2014. "Open access for railways and transaction cost economics – Management perspectives of Australia's rail companies," Research in Transportation Economics, Elsevier, vol. 48(C), pages 227-236.
    2. Mizutani, Fumitoshi, 2020. "A comparison of vertical structural types in the railway industry: A simple mathematical explanation model," Research in Transportation Economics, Elsevier, vol. 81(C).
    3. Merkert, Rico, 2010. "Changes in transaction costs over time - The case of franchised train operating firms in Britain," Research in Transportation Economics, Elsevier, vol. 29(1), pages 52-59.
    4. José A. Gómez-Ibáñez, 2016. "Open Access to Infrastructure Networks: The Experience of Railroads," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 49(2), pages 311-345, September.
    5. Huang, Wencheng & Zhang, Yue & Shuai, Bin & Xu, Minhao & Xiao, Wei & Zhang, Rui & Xu, Yifei, 2019. "China railway industry reform evolution approach: Based on the Vertical Separation Model," Transportation Research Part A: Policy and Practice, Elsevier, vol. 130(C), pages 546-556.
    6. Thomas Ehrmann & Karl-Hans Hartwig & Torsten Marner & Hendrik Schmale, 2009. "Specific Investments and Ownership Structures in Railways – An Experimental Analysis," Working Papers 12, Institute of Transport Economics, University of Muenster.
    7. Steffen Juranek, 2016. "Creating a National Champion: International Competition and Unbundling in Rail Transportation," Journal of Transport Economics and Policy, University of Bath, vol. 50(1), pages 56-75, January.
    8. Fumitoshi Mizutani & Andrew Smith & Chris Nash & Shuji Uranishi, 2015. "Comparing the Costs of Vertical Separation, Integration, and Intermediate Organisational Structures in European and East Asian Railways," Journal of Transport Economics and Policy, University of Bath, vol. 49(3), pages 496-515, July.
    9. Finger, Matthias, 2014. "Governance of competition and performance in European railways: An analysis of five cases," Utilities Policy, Elsevier, vol. 31(C), pages 278-288.
    10. Fitzová Hana, 2017. "European railway reforms and efficiency: Review of evidence in the literature," Review of Economic Perspectives, Sciendo, vol. 17(2), pages 103-120, June.
    11. Oliver E. Williamson, 2005. "The Economics of Governance," American Economic Review, American Economic Association, vol. 95(2), pages 1-18, May.
    12. Bošković, Branislav & Bugarinović, Mirjana, 2015. "Why and how to manage the process of liberalization of a regional railway market: South-Eastern European case study," Transport Policy, Elsevier, vol. 41(C), pages 50-59.
    13. Fumitoshi Mizutani & Shuji Uranishi, 2013. "Does vertical separation reduce cost? An empirical analysis of the rail industry in European and East Asian OECD Countries," Journal of Regulatory Economics, Springer, vol. 43(1), pages 31-59, January.
    14. Lerida-Navarro, Carlos & Nombela, Gustavo & Tranchez-Martin, Jose M., 2019. "European railways: Liberalization and productive efficiency," Transport Policy, Elsevier, vol. 83(C), pages 57-67.
    15. Pittman Russell, 2015. "Railways Restructuring and Ukrainian Economic Reform," Man and the Economy, De Gruyter, vol. 2(1), pages 87-107, June.
    16. Tomeš, Zdeněk, 2017. "Do European reforms increase modal shares of railways?," Transport Policy, Elsevier, vol. 60(C), pages 143-151.
    17. Chris Nash, 2013. "Rail transport," Chapters, in: Mattias Finger & Torben Holvad (ed.), Regulating Transport in Europe, chapter 3, pages 61-81, Edward Elgar Publishing.
    18. Max Zongyuan Shang & Ken McEwan, 2021. "The make‐or‐buy decision of feed on livestock farms: Evidence from Ontario swine farms," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 69(3), pages 353-368, September.
    19. Nash, Chris A. & Smith, Andrew S.J. & van de Velde, Didier & Mizutani, Fumitoshi & Uranishi, Shuji, 2014. "Structural reforms in the railways: Incentive misalignment and cost implications," Research in Transportation Economics, Elsevier, vol. 48(C), pages 16-23.
    20. Poinsot, Philippe, 2016. "Jules Dupuit And The Railroads: What Is The Role Of The State?," Journal of the History of Economic Thought, Cambridge University Press, vol. 38(2), pages 189-209, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:54:y:2013:i:c:p:14-25. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.