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Benchmarking of train operating firms -- a transaction cost efficiency analysis

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  • Rico Merkert
  • Andrew S.J. Smith
  • Chris A. Nash

Abstract

Benchmarking of rail firms has become a matter of substantial interest and many authors have emphasised the importance of transaction costs in regard to assessing the desirability of vertical separation. However, due to data and methodological limitations, previous rail efficiency studies have been unable to explicitly analyse the role that transaction cost measures play in determining the relative efficiency performance of different rail firms or rail systems. This paper incorporates recently produced measures of transaction costs into a two-stage bootstrapped data envelopment analysis (DEA), applied to a sample of 43 Swedish, German and British train operating firms. In the first stage, the number of transaction staff is included as a separate (physical) input within the DEA. This is followed by a second-step Tobit regression which seeks to evaluate the impact of institutional (vertical separation and type of operation), environmental (competition) and transactional (monetary values of transaction costs) factors on technical efficiency. The results of the analysis show that transactional factors are more important in determining technical efficiency than institutional factors and the opening-up of competition.

Suggested Citation

  • Rico Merkert & Andrew S.J. Smith & Chris A. Nash, 2009. "Benchmarking of train operating firms -- a transaction cost efficiency analysis," Transportation Planning and Technology, Taylor & Francis Journals, vol. 33(1), pages 35-53, October.
    • Handle: RePEc:taf:transp:v:33:y:2009:i:1:p:35-53
    DOI: 10.1080/03081060903429330
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    Cited by:

    1. Merkert, Rico & Williams, George, 2013. "Determinants of European PSO airline efficiency – Evidence from a semi-parametric approach," Journal of Air Transport Management, Elsevier, vol. 29(C), pages 11-16.
    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. Merkert, Rico & Hensher, David A., 2011. "The impact of strategic management and fleet planning on airline efficiency - A random effects Tobit model based on DEA efficiency scores," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(7), pages 686-695, August.
    4. Ugo ARRIGO & Giacomo DI FOGGIA, 2014. "Theoretical And Viable Charging Models For Railway Infrastructure Access: An European Survey," Management Research and Practice, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 6(2), pages 5-24, June.
    5. Merkert, Rico & Morrell, Peter S., 2012. "Mergers and acquisitions in aviation – Management and economic perspectives on the size of airlines," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(4), pages 853-862.
    6. Ибрагимова Найля Мурадовна, 2015. "Эмпирическая Оценка Эффективности Ндфл И Ндс В Узбекистане," Higher School of Economics Economic Journal Экономический журнал Высшей школы экономики, CyberLeninka;Федеральное государственное автономное образовательное учреждение высшего образования «Национальный исследовательский университет «Высшая школа экономики», vol. 19(1), pages 81-103.
    7. Link, Heike, 2016. "A Two-Stage Efficiency Analysis of Rail Passenger Franchising in Germany," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 50(1), pages 76-92.
    8. Wheat, Phill & Smith, Andrew S.J. & Rasmussen, Torris, 2018. "Can competition for and in the market co-exist in terms of delivering cost efficient services? Evidence from open access train operators and their franchised counterparts in Britain," Transportation Research Part A: Policy and Practice, Elsevier, vol. 113(C), pages 114-124.
    9. Arrigo, Ugo & Di Foggia, Giacomo, 2015. "Produzione, costi e performance delle principali reti ferroviarie dell’Unione Europea [Production, costs and performance of the main European rail networks]," MPRA Paper 67799, University Library of Munich, Germany.
    10. Andrade Furtado, Francisco Manuel Bastos, 2013. "U.S. and European Freight Railways: The Differences That Matter," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 52(2).

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