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Creating a National Champion: International Competition and Unbundling in Rail Transportation

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  • Steffen Juranek

Abstract

This article investigates the incentives to unbundle operations and infrastructure in the railway industry in a two-country model from the viewpoint of national governments. The analysis shows that the decision to unbundle institutionally or organisationally with separated accounts depends crucially on the importance of cross-border transportation. If cross-border transportation is sufficiently important, national governments choose accounting separation. However, for low-efficiency gains within a bundled firm, national governments are stuck in a Prisoner's Dilemma and would be better off coordinating on institutional separation. This result justifies major policy initiatives of the European Union and explains the behaviour of national governments. © 2016 LSE and the University of Bath

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  • 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.
    • Handle: RePEc:tpe:jtecpo:v:50:y:2016:i:1:p:56-75
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    1. Mizutani, Fumitoshi, 2024. "Empirical analysis of the factors behind rail infrastructure investment," Transport Policy, Elsevier, vol. 150(C), pages 244-254.

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    More about this item

    JEL classification:

    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation

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