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Deregulation, competition, and consolidation: The case of the German interurban bus industry

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  • Dürr, Niklas S.
  • Heim, Sven
  • Hüschelrath, Kai

Abstract

We provide an empirical assessment of the German interurban bus industry two years after its deregulation in January 2013. In addition to a general description of key developments of the industry, we use a unique route-level price data set to study both competitive interaction in general and the potential price effects of a recently announced merger of the two largest players in the market in particular. We find that route-level average prices, inter alia, do not only depend on the number of competitors but especially on the composition of firms operating on a particular route. Although our empirical results suggest short-term price increases on certain route types post-merger, it remains an open question whether the merger should be classified as anticompetitive.

Suggested Citation

  • Dürr, Niklas S. & Heim, Sven & Hüschelrath, Kai, 2015. "Deregulation, competition, and consolidation: The case of the German interurban bus industry," ZEW Discussion Papers 15-061, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:15061
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    References listed on IDEAS

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    1. Perl, Lewis J., 1997. "Regulatory restructuring in the United States," Utilities Policy, Elsevier, vol. 6(1), pages 21-34, March.
    2. Sven Maertens, 2012. "Buslinienfernverkehr in Deutschland — effiziente Ausgestaltung einer Liberalisierung," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 92(8), pages 554-562, August.
    3. Martin Schiefelbusch, 2013. "Past and Future Regulation of Interurban Coach Services in Germany," Journal of Transport Economics and Policy, University of Bath, vol. 47(2), pages 299-305, May.
    4. Severin Borenstein & Nancy L. Rose, 2007. "How Airline Markets Work...Or Do They? Regulatory Reform in the Airline Industry," NBER Working Papers 13452, National Bureau of Economic Research, Inc.
    5. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
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    Cited by:

    1. Dürr, Niklas S. & Hüschelrath, Kai, 2015. "Competition in the German interurban bus industry: A snapshot two years after liberalization," ZEW Discussion Papers 15-062, ZEW - Leibniz Centre for European Economic Research.
    2. Blume, Maximilian & Oberländer, Anna Maria & Röglinger, Maximilian & Rosemann, Michael & Wyrtki, Katrin, 2020. "Ex ante assessment of disruptive threats: Identifying relevant threats before one is disrupted," Technological Forecasting and Social Change, Elsevier, vol. 158(C).
    3. Matthias Beestermöller & Levke Jessen-Thiesen & Alexander Sandkamp & Alexander-Nikolai Sandkamp, 2023. "Striking Evidence: The Impact of Railway Strikes on Competition from Intercity Bus Services in Germany," CESifo Working Paper Series 10483, CESifo.
    4. Riku Buri & Miika Heinonen & Jonatan Kanervo & Joel Karjalainen, 2024. "The effects of entry deregulation: evidence from interurban passenger transport," Journal of Regulatory Economics, Springer, vol. 66(2), pages 181-204, December.
    5. Javier Asensio & Anna Matas, 2024. "Competition effects of intercity bus tendering reforms in Spain," Working Papers wpdea2406, Department of Applied Economics at Universitat Autonoma of Barcelona.

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    More about this item

    Keywords

    deregulation; competition; merger; interurban bus services; Germany;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

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